The leadership group for the Task Force on Sustainable Revenues for Supportive Housing Services to End Homelessness made a presentation at the board’s May 22, 2014 working session. Their recommendations include the goal of building a $50 million endowment over 20 years. Payouts from the endowment would fund supportive services – such as treatment for mental illness and substance abuse – with the intent of addressing the root causes of homelessness. The concept is called permanent supportive housing, and is part of the community’s broader  Blueprint to End Homelessness, which was created in 2004 and is being updated.

A possible millage – recommended at 0.25 mills, for no more than 20 years – would help fund supportive services while the endowment is built. County commissioners are being asked to consider putting such a millage on the ballot, possibly in 2015.

Several steps have already been taken to achieve these goals. An endowment was established in 2011, with $2.1 million in commitments so far. That amount includes a $1 million gift from the St. Joseph Mercy Health System to create the endowment, which is called the Sister Yvonne Gellise Fund for Supportive Services for Housing. Gellise is the former CEO of St. Joe’s. She served on the task force and is a founding board member of the Washtenaw Housing Alliance. Another $1 million commitment comes from the Ann Arbor Area Community Foundation (AAACF), where the endowment is housed. AAACF CEO Cheryl Elliott is another task force member. In addition, an anonymous donor has contributed $100,000.

The first fund distribution – of $26,100 – will be made this fall in a competitive grant process. AAACF’s distribution committee – an all-volunteer group – will be responsible for making grant recommendations.

AAACF is also helping provide a three-year, part-time development job to support fundraising for this endowment. Funding for the position will come from the Washtenaw Housing Alliance ($25,000), the AAACF ($5,000) and an anonymous donor ($10,000).

The foundation posted the position earlier this summer, with the intent of making a hire as soon as possible. The position would be in place until at least mid-2017. The employee will report to AAACF’s vice president for development and donor services, and to the Sister Yvonne Gellise Fund development committee. Members of that committee are the same people who’ve served on the leadership team of the task force, Elliott said. In addition to herself, members include Bob Chapman, Sister Yvonne Gellise, Bob Guenzel, Norm Herbert and Dave Lutton.

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

Former Washtenaw County administrator Bob Guenzel and Mary Jo Callan, director of the county’s office community & economic development, talk with former University of Michigan treasurer Norm Herbert before the start of the May 22, 2014 county board working session. Guenzel and Herbert are members of a task force on supportive housing. (Photos by the writer.)

The leadership team of the Task Force on Sustainable Revenues for Supportive Housing Services briefed commissioners on their recommendations, including the goal of building a $50 million endowment over 20 years. Payouts from the endowment would fund supportive services – such as treatment for mental illness and substance abuse – with the intent of addressing the root causes of homelessness. The concept is called permanent supportive housing, and is part of the community’s broader Blueprint to End Homelessness, which was created in 2004 and is being updated.

A possible millage – recommended at 0.25 mills, for no more than 20 years – would help fund supportive services while the endowment is built. County commissioners are being asked to consider putting such a millage on the ballot, possibly in 2015.

Former county administrator Bob Guenzel, a task force member, told commissioners that the task force believes this approach “is absolutely the right thing to do, to end homelessness and keep people housed. We feel very strongly about that. It’s a moral issue.” There’s also a strong business case for this approach when looking at the cost of emergency services and the criminal justice system, compared to the cost of permanent supportive housing, he said.

Several steps have already been taken to achieve these goals. An endowment was established in 2011, with $2.1 million in commitments so far. That amount includes a $1 million gift from the St. Joseph Mercy Health System to create the endowment, which is called the Sister Yvonne Gellise Fund for Supportive Services for Housing. Gellise is the former CEO of St. Joe’s. She’s on the task force and is a founding board member of the Washtenaw Housing Alliance. Another $1 million commitment comes from the Ann Arbor Area Community Foundation (AAACF), where the endowment is housed. AAACF Cheryl Elliott is another task force member. In addition, an anonymous donor has contributed $100,000.

The first fund distribution – of $26,100 – will be made this fall in a competitive grant process. AAACF’s distribution committee – an all-volunteer group – will be responsible for making grant recommendations.

AAACF is also helping provide a three-year, part-time development job to support fundraising for this endowment. Funding for the position will come from the Washtenaw Housing Alliance ($25,000), the AAACF ($5,000) and an anonymous donor ($10,000).

The foundation will post this position in early June, Elliott reported, with the intent of making a hire as soon as possible. The position would be in place until at least mid-2017. The employee will report to AAACF’s vice president for development and donor services, and to the Sister Yvonne Gellise Fund development committee. Members of that committee are the same people who’ve served on the leadership team of the task force, Elliott said. In addition to herself, members are Bob Chapman, Sister Yvonne Gellise, Bob Guenzel, Norm Herbert and Dave Lutton. They hope to get an additional two or three members, she said.

The next steps in this process include a request to the county board to sunset the task force at the June 4 board meeting. The board will also be asked to consider the task force’s recommendation for a millage. “Please use this year and into 2015 to set a millage strategy,” Elliott said.

The task force also stressed the importance of a public outreach and education effort, to help build awareness and support for the endowment.

The task force presentation was attended by five of the county’s nine commissioners. During their discussion, Conan Smith (D-District 9) expressed interest in having the county bond for this initiative – either for the full $50 million, or some portion of that amount. The county now has a triple-A bond rating, Smith noted. [That news had been announced earlier in the day. In general, higher ratings allow organizations to secure better terms for borrowing funds.] “This gives us an opportunity… to actually have some real impact in the community,” Smith said.

Task force members indicated that they hadn’t considered the option of bonding, and Elliott had some concerns about whether it would be legal to use taxpayer dollars for an endowment. They plan to explore the possibility, including consultation with legal counsel.

Background

By way of brief background, Washtenaw County and several other community partners developed the Blueprint to End Homelessness in 2004. Washtenaw Housing Alliance – a consortium of housing and shelter providers, social service agencies, and other groups that provide support services – was given the task of implementing the blueprint.

As part of the implementation efforts, in 2007 the county board created the Task Force on Sustainable Revenues for Supportive Housing Services. Its charge was this: “Explore locally viable long-term revenue sources for the creation and sustainability of supportive housing units and related services.”

The following year, the task force delivered a report and set of recommendations, which the county board adopted on Oct. 2, 2008. [.pdf of 2008 report and recommendations] As summarized in the report, the recommendations are:

Promote Supportive Housing in Washtenaw County: Mobilize new supportive housing service funding for 500 units at an average cost of $5,000/unit/year.

Charter an Implementation Process: Charter a “Phase II” planning and implementation process (via action of the Washtenaw County board of commissioners) to provide continuing leadership and coordination in advancing achievement of the recommendations articulated in this report of the Task Force on Sustainable Revenues for Supportive Housing Services.

Educate the Public: Design and launch a public education campaign focused on the nature and value of supportive services with an aim of raising community support and resources for supportive housing initiatives and the 500‐Unit Plan.

Secure Bridge Funding: Mobilize multi‐systems commitments of up to $1.2 million/year in public‐private resources as “bridge funding,” to support at least 200 units of supportive housing, based on the model being implemented through the Joint Integrated Funding Pilot Project in 2008‐2010. This gap funding will be replaced by new revenue sources, as described within this report.

Re‐allocate Mainstream Services Funding: Advocate with mainstream service systems to mobilize supplemental commitments of up to $500,000 per year in mainstream systems resources [e.g. Community Support & Treatment Services (CSTS), Employment Training & Community Services (ETCS), Head Start) to help address inflation in services costs and expand impact of new community investment in supportive housing services.

Establish User Fees: Establish a strategy to recruit appropriate consumer service contributions (user fees) toward supportive services costs in new units created through the 500‐Unit Plan.ƒ

Explore Millage Funding: Explore the development of a millage strategy that will generate the needed amount of dedicated and sustainable revenue over a period of time not to exceed twenty years.

Raise Endowment Funding: Raise $10‐20 million in new private/corporate/foundation funding to create a Supportive Housing Services Endowment (by 2014), sufficient to generate significant continuing revenues dedicated toward the total of ongoing services costs required for 500 new units of housing.

A leadership team was formed to work on the second phase of this effort, and workgroups were established in three areas: (1) public education; (2) millage strategy; and (3) private endowment.

The results of this effort were presented to county commissioners on May 22.

Task Force Presentation

Bob Chapman – the task force chair, CEO of United Bank & Trust, and chair of the Washtenaw Community College Foundation – introduced other members of the task force leadership team, who all attended the May 22 working session:

• Cheryl Elliott, president of the Ann Arbor Area Community Foundation.
• Sister Yvonne Gellise, retired CEO of the Saint Joseph Mercy Health System.
• Bob Guenzel, retired Washtenaw County administrator.
• Norm Herbert, retired University of Michigan treasurer and associate vice president.
• Dave Lutton, president of the Charles Reinhart Company.

Their intent, Chapman said, was to give the county board some background about the Blueprint to End Homelessness and its plan for adding 500 units of permanent supportive housing, as well as the history of the task force. They would also introduce a plan for creating an endowment for supportive services, and would ask that the board formally dissolve the task force at its June 4 meeting.

Task force members Dave Lutton (standing) and Bob Guenzel.

Bob Guenzel told commissioners that this work goes back over 10 years. [It began when Guenzel was still county administrator. He retired in 2010.] The Blueprint to End Homelessness, which was developed in 2004, included major priorities that the community planned to focus on: (1) homeless prevention, to help keep people secure in their homes; and (2) housing with supportive services.

Regarding housing with services, Guenzel noted that the most difficult people to house are those who need services to help them find housing and to stay housed. The idea is to form a system of care and to engage the community to do that, he said. Dave Lutton chaired the committee on this topic, to develop realistic goals and to articulate why it’s important to provide supportive services.

Lutton spoke next, noting that there are currently about 350 units of permanent supportive housing in the county, so they haven’t met the target of 500 yet. People in these units earn below 30% of the area median income (AMI). The blueprint had called for 250 units for families and 250 units for individuals, with a goal of breaking the cycle of poverty and homelessness, “which is very challenging,” Lutton said.

Permanent supportive housing combines housing with services that people need, Lutton explained. The theory is that if housing is stabilized, there’s a better chance of addressing the underlying needs and challenges that contribute to homelessness, such as substance abuse and mental illness.

The agencies that form the Washtenaw Housing Alliance in reality are dealing with people who are earning about 15% AMI, Lutton said, so these are people who are extremely poor.

Contributing factors to homelessness are many and varied, Lutton said. Factors include lack of employment, drug and alcohol dependencies, physical disabilities, and mental illness – as well as a lack of support systems for the mentally ill, compared to a few decades ago. If people are housed, it’s much easier to tackle these other challenges, he said.

Someone living in permanent supportive housing pays no more than 30% of their income for rent. There are government vouchers and other subsidies that help offset the gap between that amount and the actual cost of housing, Lutton noted. The key factor is that the tenant holds the lease and it’s not limited by a length of tenancy. That’s another way to encourage housing stability, he said.

Permanent supportive housing requires property management, Lutton said, as well as a greater level of cooperation, coordination and communication with the landlord and support service providers. Participating landlords are “admirable, and know that they’re taking on a more challenging population than the mainstream public,” Lutton added, so it’s important to have a safety net – a quick, effective response – when a problem occurs.

Carole McCabe, executive director of Avalon Housing.

The whole system of supportive services is voluntary, Lutton explained. That is, it’s not thrust upon a family or individual. They agree to be open to the services. Services are customized according to each tenant’s needs, he noted, and include case management, crisis intervention, and assistance with all kinds of basic needs, including food and health care. When it’s done well, Lutton said, the tenant begins to feel like part of a community, and becomes connected to other tenants. “That again reinforces permanency,” he said. Lutton noted that tenants of the nonprofit Avalon Housing, which provides permanent supportive housing, stay an average of seven or eight years. A lot of what Avalon does is to create a sense of community for its tenants, he said.

Guenzel told commissioners that the task force believes this approach “is absolutely the right thing to do, to end homelessness and keep people housed. We feel very strongly about that. It’s a moral issue.”

More convincing to some people, Guenzel added, is that there’s a tremendous business case for this approach. Homelessness is very costly for taxpayers, he said. Studies – including research by the Corporation for Supportive Housing – have shown that emergency room and hospital in-patient days decreases by 50% for people who are in permanent supportive housing. Use of emergency detox services decreases by 80%. And earned income – which helps people get back on their feet, Guenzel noted – increases by 50%. So there’s a strong business case for this approach when looking at the cost of emergency systems compared to the cost of permanent supportive housing, he said.

Other community costs are also impacted, Guenzel noted. The average cost for permanent supportive housing is about $40 a day. That compares to the average daily cost of the state prison ($94), county jail ($129), and emergency shelter ($66). That’s a tremendous savings to taxpayers, he said, compared to the costs of the criminal justice system and homeless shelters.

In the past 10 years, new units of permanent supportive housing have come on line, Guenzel said. When the YMCA closed its downtown location, the city lost 100 units of low-income housing, he noted. Other units have come on line, but not all of them include support services. There are currently an estimated 350 units of permanent supportive housing, including about 75% that are managed by the nonprofit Avalon Housing. Most recently, Avalon opened a complex on Pauline Boulevard.

Guenzel noted that single-site complexes like the one on Pauline are more cost effective to offer supportive services, compared to housing at scattered sites with private landlords. But to meet the needs of the community, all types are necessary, he said.

Chapman spoke next, reminding commissioners that in 2007 the county board created the task force. Its charge was to “explore locally viable long-term revenue sources for the creation and sustainability of supportive housing units and related services.” In 2008, the task force delivered a report with recommendations, which was approved by the board.

From left: Norm Herbert, Cheryl Elliott, and Bob Chapman.

Those recommendations included starting a second phase of this effort, Chapman said. They created a leadership team and established workgroups in three areas: (1) public education; (2) millage strategy; and (3) private endowment.

Regarding public education, the real intent is to raise the public’s awareness and support for resources that would be needed to sustain supportive housing services. That was necessary, Chapman noted, because the task force’s main recommendation back in 2008 was to seek a voter-approved millage. The millage would provide dedicated revenue for a period not to exceed 20 years.

At the same time, the third initiative was to build a private endowment, Chapman explained. So at the end of a 20-year millage, there would be money available to replace those tax revenues.

However, starting in last 2008 there was a significant change, Chapman noted: “We went through the Great Recession.” That period included a reduction in state and federal funding sources, and “no appetite for a millage,” he said.

Norm Herbert picked up the presentation, noting that fundraising slowed down considerably in 2008 as well. So the task force decided to shift the priority away from a millage and toward building an endowment. They set an initial goal of $17 million. That amount was largely influenced by the amount it would take to fund supportive services for 136 units, Herbert said. They were using an annual cost of $5,000 per unit to provide the services.

The value of an endowment is that it’s permanent, and provides an annual payout in good and bad economic times, Herbert noted. “It’s a reliable source of revenue, and should provide the same or greater purchasing power over the time that these needed supportive services can be provided,” he said.

Given the challenges of building an endowment, it was important to determine “community readiness” for such an initiative, Herbert explained. The firm Hammond & Associates LLC was hired in 2013 to conduct that assessment. They held 21 one-on-one confidential interviews, as well as two group interviews. “We learned through that process that more community education was needed, both on the complexities of homelessness, and secondly, on the workings of an endowment fund and of how that would provide the ongoing needed support,” he said.

Sister Yvonne Gellise.

They also learned that professional expertise would be needed to assist with building the endowment. “It wasn’t just a matter of going out and asking for support, as we do with annual fund drives,” Herbert said. “This took on a different level of complexity, because people need to understand how an endowment works.”

Herbert reported that the task force has achieved some success so far. They established an endowment in 2011 and raised $2.1 million in commitments. That amount includes a $1 million gift from the St. Joseph Mercy Health System to create the endowment, which is called the Sister Yvonne Gellise Fund for Supportive Services for Housing. Gellise is the former CEO of St. Joe’s, and is a founding board member of the Washtenaw Housing Alliance.

Another $1 million commitment comes from the Ann Arbor Area Community Foundation (AAACF), where the endowment is housed. In addition, an anonymous donor has contributed $100,000.

Cheryl Elliot, the AAACF’s CEO, reported that the fund will disburse revenue annually using a process set up by AAACF with input from the Washtenaw Housing Alliance, the county’s office of community & economic development, and the coordinated funding partners. The first fund distribution, of $26,100, will be made this fall in a competitive grant process, she said.

The AAACF’s distribution committee – an all-volunteer group – will be responsible for making grant recommendations, Elliott said. She added that it looks like an additional $24,500 will be available for grants in 2015.

Regarding staff to help build the endowment, in March of 2014 the AAACF board agreed to contract a three-year part-time development position at the foundation solely to support the fund development efforts for this endowment. Up to $40,000 will be needed annually for this job, Elliott said, and will come from the Washtenaw Housing Alliance ($25,000), the AAACF ($5,000) and an anonymous donor ($10,000).

Felicia Brabec (D-District 4) was a member of the task force on sustainable revenues for supportive housing services.

The foundation will post this position in early June, Elliott reported, with the intent of making a hire as soon as possible. The position would be in place until at least mid-2017. The employee will report to AAACF’s vice president for development and donor services and the Sister Yvonne Gellise Fund development committee. Members of that committee are the same people who’ve served on the leadership team of the task force, Elliott said. In addition to herself, members are Bob Chapman, Sister Yvonne Gellise, Bob Guenzel, Norm Herbert and Dave Lutton. They hope to get an additional two or three members, she said.

The goals for the endowment itself are large but achievable, Elliot told commissioners. Over the next five years, the goal is to raise $5 million in gifts and pledges. For the seven to ten years after that, the goal is to raise $17 million. The long-term goal is to raise $50 million in 20 years – a combination of gifts, pledges and return on investments.

Elliott outlined next steps in the process, which includes asking the county board to sunset the task force at the June 4 board meeting. The board will also be asked to consider the task force’s recommendation for a millage. “Please use this year and into 2015 to set a millage strategy,” she said.

Gellise wrapped up the presentation, joking that “I’m getting a little tired of hearing my name – but at least it’s in connection with something good.” She hoped that commissioners saw the connection between having a home and improving the health of this community – referring to a presentation earlier in the working session by the county’s health officer, Ellen Rabinowitz.

Providing supportive services for housing is not only successful in keeping people housed, Gellise said, but is also cost-effective, with a good return on resources invested. “The bottom line – and I am a bottom-line person: It is the right thing to do. We need to do it,” she said.

Gellise thanked commissioners for their support, and asked them to “keep a millage on your radar screen.”

Board Discussion

Several of the five commissioners who attended the working session thanked the task force for their service.

Conan Smith (D-District 9) asked for clarification about the amount needed per unit to provide housing and supportive services. The $5,000 per unit annually is the cost to provide supportive services, to eventually be covered by the endowment. The $40 per day per unit is estimated rent – to be covered by both the tenant and any available subsidy.

Conan Smith (D-District 9).

Smith elicited from Cheryl Elliott the fact that the Ann Arbor Area Community Foundation currently manages about $76 million in total assets. Elliott said the goal is to get an 8% return on investments to allow for a 5% spending policy and 3% inflation. The goal is to preserve the inter-generational equity or purchasing power of a gift or a fund, she said. So if someone set up a $10,000 endowment 50 years ago, “that fund had better be more than $10,000 today and have been paying out grant dollars every year,” Elliott said. AAACF staff and volunteers pay serious attention to that, she added.

Responding to additional queries from Smith, Elliott reported that AAACF was founded in 1963 and over those years the return on investments has varied. The way that funds are invested has also changed, she noted. Today the portfolio is very diverse, everything from traditional U.S. stocks to emerging markets and alternative investments – hedge funds, private equity, and real assets. Elliott noted that Norman Herbert sits on the foundation’s finance and investment committee.

Herbert said that over the last 20 years, AAACF has hit its target of an 8% return. In 2008, the portfolio lost 30.8% of its value, Elliott added, but the value was recouped two years after that. However, because the payout policy is based on a 16-quarter rolling average, AAACF was able to continue making grant payouts during that time, she noted.

Smith said he asked these questions to recognize that the AAACF has been doing this work for a long time, and has been quite successful.

Board Discussion: Bond vs. Millage

Conan Smith asked Bob Guenzel whether the task force had considered bonding as an option, rather than a millage. What if the county bonded for $50 million toward this initiative?

Andy LaBarre (D-District 7), one of the commissioners representing Ann Arbor, is chair of the board’s working sessions.

Guenzel replied that there would still need to be a revenue stream to pay off those bonds. Smith indicated that if the county borrows at a 2% interest rate and invests the money, getting a return of 8%, then bonds could be leveraged to pay off the debt. “It seems to me like we might be able to achieve the greater community goal in a less costly way, perhaps, in a partnership like that,” Smith said. Guenzel said they’d certainly be willing to consider it.

Smith reported that he and Mary Jo Callan – director of the county’s office of community & economic development – have been exploring the concept of “social impact” bonds as a mechanism for financing social programs. He said it would be worth taking time to look at the potential of bonding. It seemed to him like bonding would require a substantially lower revenue stream to pay it off.

The county now has a triple-A bond rating, Smith noted. [That news had been announced earlier in the day. In general, higher ratings allow organizations to secure better terms for borrowing funds.] “This gives us an opportunity, if we’re going to do projects that scale, to actually have some real impact in the community,” Smith said.

Herbert said there might be some arbitrage issues coming into play that could be a concern, so they’d need to look at that. He indicated that the possibility could be explored.

Smith then asked if the county is currently contributing to this initiative. Amanda Carlisle, executive director of the Washtenaw Housing Alliance, replied that the county provides support through its participation in coordinated funding. Avalon Housing, for example, is getting $85,000 from the county this year through coordinated funding. Carole McCabe, Avalon’s executive director, noted that the amount is a decrease from last year.

Guenzel described funding for housing and supportive services as a “hodge-podge,” including federal grants as well as the local coordinated funding.

Smith asked if the county’s contribution to Avalon Housing would be diminished, if the endowment were fully capitalized. Is that the intent? Guenzel replied that it might be the outcome, if the endowment is large enough. But “that’s a very long way off,” he added.

County administrator Verna McDaniel.

“I’m not so sure it is,” Smith responded. For the sake of argument, Smith said, let’s assume the county is making a $100,000 annual investment in supportive housing now. If the county wants to ensure that same amount is provided in perpetuity, adjusted for inflation, then they’d need to give the endowment $2 million, he said. Herbert clarified that Smith’s calculation assumes a 5% distribution rate, and that 4% would probably be more reasonable to assume.

Smith suggested that the county give the endowment $2 million, and also somehow ensure that its current grantees – like Avalon Housing – would be held harmless in terms of support from the county, until the remainder of the endowment is built.

Cheryl Elliott told Smith that in Michigan, it’s not legal to put public taxpayer dollars into an endowment like this. Herbert noted that these are issues that would need to be researched.

Dave Lutton reported that the task force has been working on the understanding that a 0.25 mill tax would fund 500 units of permanent supportive housing. “We don’t think that 500 units is all that’s needed in Washtenaw County in terms of housing or permanent supportive housing, but it’s a great leap from where we’ve been,” he said. So that’s the first target of this plan.

Elliott added that the idea of a millage stems from looking at what other communities are doing, and at what would work best for Washtenaw County – a permanent endowment. Herbert noted that the intent is to build the endowment so that after a period of time, the millage is no longer needed. The goal of $50 million would support 500 units, which was part of the original Blueprint to End Homelessness.

Smith ventured that there are some “interesting financial opportunities for the county to be a partner in this strategy going forward.” That might include a millage, bonding, or potentially using county funds in an endowment-type effort, he said. This is a public good and a public responsibility, Smith added, and it’s something that taxpayers should want to be a part of.

Yousef Rabhi (D-District 8).

Andy LaBarre (D-District 7) noted that an advisory committee will be looking at the use of the county-owned Platt Road property, a 13.5-acre site at 2260 and 2270 Platt Road. He thought there was an opportunity for affordable housing solutions at that location, and he asked the task force leadership team to consider advocating for that.

Related to the possible funding options, LaBarre asked how seriously should the county look at the possibility of bonding – assuming that a millage isn’t politically viable. Would the county’s upgraded credit rating have any kind of effect on that decision?

Herbert replied that legal counsel should be involved in helping to determine whether bonding is an option.

LaBarre then asked what the fallback plan would be, if a millage isn’t pursued or if voters reject it. Herbert responded: Under that scenario, the only real option would be to build the endowment through private donations. That’s an important part of the education initiative that the task force outlined, he said.

LaBarre wondered if there was any hope of support from the state or federal governments. “Not currently,” Herbert replied.

Felicia Brabec (D-District 4), who was part of the task force, thanked the leadership team for their work. She was amazed at their ingenuity, passion and dedication.

Yousef Rabhi (D-District 8) also thanked the task force. A lot of things that the county is celebrating now are due to work that’s happened in the past, he said. Former county administrator Bob Guenzel had laid a lot of groundwork for this, Rabhi added. There are a lot of challenges, he noted, but the community now understands what the problem is and is seriously tackling it.

There are a lot of creative ideas, Rabhi said. He agreed with LaBarre that there’s a great opportunity at the Platt Road site. It might not result in a cash contribution from the county, but the site could be used for supportive housing, affordable housing or even mixed-income housing, he said. The 13.5 acres might be more valuable if used for housing – more so than if it were sold, he noted.

Rabhi thought there was a role for commissioners to play, even as individual community members helping to raise awareness of this initiative and to help build the endowment. “We can and should certainly play an advocacy role in helping to lead the community movement toward making that endowment a reality.”

Present: Felicia Brabec, Andy LaBarre, Yousef Rabhi, Conan Smith, Dan Smith.

Absent: Kent Martinez-Kratz, Ronnie Peterson, Alicia Ping, Rolland Sizemore Jr.

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This painting of blue houses is not in Avalon Housing's site plan for its affordable housing proposal at 1500 Pauline. It's part of a display by fifth grade students in the lower level of the downtown Ann Arbor District Library, where the Jan. 20 planning commission meeting was held.

The project will include demolishing the existing structure and constructing five one- and two-story buildings and a community center. Though commissioners supported the project, some raised concerns over the relocation of current residents and the fact that the new complex, when completed, will have fewer units – 32, compared to the current 47 apartments. Of those, there will also be far fewer one-bedroom units – six, compared to the current 21.

Representatives from Avalon told commissioners that the lower number was sustainable – 35% of the units will be set aside for residents who’ll receive supportive services. They also said the location was more suited for families, and that there’s more need for two- and three-bedroom affordable housing units in the city.

Another project on the agenda – a site plan and special exception use for 630 Oxford – was postponed, as recommended by city planning staff. The Phi Kappa Psi fraternity wants to turn an existing rental duplex into their chapter’s permanent home, housing up to 24 residents. The housing director and some board members for the neighboring Delta Gamma sorority came to Thursday’s meeting to object to the plan, saying they did not want fraternity culture to disrupt their quiet neighborhood.

Commissioners also unanimously recommended approval of the annexation of 1575 Alexandra Blvd., a vacant 0.82-acre lot now in Ann Arbor Township. The lot is surrounded by the city’s Riverwood Nature Area – its owner plans to build a single-family home on the site.

Also at Thursday’s meeting, Wendy Rampson of the city’s planning staff reminded commissioners of a public meeting on Wednesday, Jan. 26 to get community feedback on draft recommendations for R4C and R2A residential zoning district ordinance revisions. The meeting runs from 6-8 p.m. at the lower level of the downtown Ann Arbor District Library, 343 S. Fifth Ave.

1500 Pauline Redevelopment

The nonprofit Avalon Housing submitted its site plan for the 1500 Pauline project in December. Now called Parkhurst Apartments, the complex – located west of Fritz Park, between Seventh and West Stadium – includes 48 apartment units housing federally subsidized low-income residents. Of those units, one is used for community space, 21 are one-bedroom units, and the rest are two- and three-bedroom apartments.

The plan is to tear down the existing building and construct a new five-building complex with 32 units, a playground and community center, at an estimated cost of $8 million. That cost includes an upfront developer’s fee – typical for nonprofit projects like this – as well as costs associated with relocating current residents and paying for their housing at an alternative site for up to five years, as mandated by federal law under the Uniform Relocation Assistance and Real Property Acquisition Policies Act.

Avalon expects to fund the project through a combination of sources, including Low Income Housing Tax Credits, HOME program subsidy (HUD funds allocated through the Michigan State Housing Development Authority and the Washtenaw Urban County), the Federal Home Loan Bank, and private loan funds.

The city’s planning staff recommended approval of the project’s site plan.

1500 Pauline: Public Hearing

Saying that he lived at 1500 Pauline, Gladwin McGee wondered why the apartments were in such disrepair, when they had been renovated relatively recently – in the late 1990s. He also questioned why the number of units were being reduced, given that there’s a lack of affordable housing in Ann Arbor.

Jim Mogensen noted that he was speaking for himself, but that he’s past president of the nonprofit Religious Action for Affordable Housing. It’s important that this site remain a place for affordable housing, he said. It’s also important that there are as many two- and three-bedroom apartments as possible – those units are harder to find than one-bedroom apartments, he observed. He also spoke about the cost of the project, saying that in nonprofit projects like this, most of the money is paid upfront for the development costs – unlike for-profit projects, which recoup their costs over time.

Michael Appel, associate director of Avalon Housing, told commissioners about the history of the complex. It’s owned by Washtenaw Affordable Housing Corp., which renovated it in 1999. It had been managed by a series of private management companies, he said, until Avalon took over operations in 2009. The complex has suffered from operating losses and deferred maintenance – that’s why they need to tear it down and rebuild. The architect who inspected the complex found hundreds of immediate and short-term issues that needed to be addressed to keep the property up to code.

In previous years, it has only met code after “substantial” subsidies by the city, Appel said. Another factor: The Michigan State Housing Development Authority (MSHDA) determined that because of the significant infrastructure problems, they weren’t willing to invest in the project unless it were rebuit – “leaving us with a very tough choice,” Appel said. They’re working with tenants on relocation – it’s a process that’s tightly regulated by federal law, he said, and the joint city/county office of community development is involved. He wrapped up by saying if they gain approval that night from the planning commission, they could be on the city council’s Feb. 21 agenda and meet a March deadline to apply for state tax credits through MSHDA. The end result, he said, is that tenants will have a much nicer place to live.

Wendy Carty-Saxon, Avalon Housing's director of housing development, speaks to the planning commission during a public hearing on the 1500 Pauline site plan.

Wendy Carty-Saxon, Avalon’s director of housing development, reported that they’d held two community meetings and two meetings for residents – both had elicited positive responses, she said. [.pdf file of summary from those meetings] The design of the new site will open it up to the neighborhood, she said, providing more “eyes on the street” which will help with security issues. The question of density – how many new units to build – was a difficult one, she said. But they tried to look at what would be sustainable to operate in the future. The 32 units they’re proposing fit with the site’s current zoning, she said. It’s also similar in size to Carrot Way, another Avalon supportive housing project. They wanted to preserve the number of two- and three-bedroom units, she said, and add a modest community center. The site will also have improved barrier-free access.

Lekendrick “Levi” Murphy told commissioners that this is his third year living at 1500 Pauline, and that he likes the neighborhood. As a single male, he said the reduction in one-bedroom units was pressing on his mind. It’s important to be aware of how people are treated as they’re relocated, he said, and to look at who will be allowed to move back in. By and large, the residents there now are “fine people,” he said, adding that he likes the proposed site plan.

John Milroy has lived for 10 years in a house on Northwood, neighboring the complex. He attended one of the community meetings held by Avalon, and said that they seem like they want to do the right thing. He said he had no reason to object to the project, and looked forward to not having to look at a crumbling parking lot anymore. He said he supported the project.

1500 Pauline: Commissioner Deliberations

Wendy Woods began by asking for clarification of the types of units that are currently available at the complex. There are 21 one-bedroom units, with the remaining units divided between two-bedroom and three-bedroom apartments, Avalon’s Wendy Carty-Saxon said. One of the three-bedroom apartments is used for community space.

Woods noted that in another Avalon project being built on North Main – called Near North – the nonprofit had argued that there was a shortage of one-bedroom apartments, and that’s why Near North needed to have more one-bedroom units. Woods asked for Avalon staff to help the commission understand how they can rationalize a reduction in one-bedroom units for the 1500 Pauline project, which will include only six one-bedroom apartments.

Michael Appel said it was largely an issue of location. Near North is closer to downtown, opening onto Main Street. It didn’t seem ideal for larger family-sized units. In contrast, 1500 Pauline is in a neighborhood setting, on a less-busy street, next to a park. They also were working with the city/county office of community development, and OCD staff felt that more two- and three-bedroom units were needed. One reason why there are fewer overall units is that they felt the higher density in the past led to some of the problems at the complex, he said.

Woods asked what kind of problems they’ve experienced. Appel explained that in the two years they’ve been managing the complex, the issues of stability, safety and turnover related to higher density. If you compare on a bedroom-per-acre basis, 1500 Pauline has higher density than Carrot Way or many other public housing units.

They’re trying to preserve low-income housing on that site, he said, and were given the option of redeveloping it or losing it – without reinvestment, it would go bankrupt. That drove the decision to redevelop, and they then tried to determine the appropriate mix of units, he said.

Michael Appel and Carole McCabe of Avalon Housing answer questions from Ann Arbor planning commissioners about the 1500 Pauline project at their Jan. 20 meeting.

Carole McCabe, Avalon’s executive director, stepped up to the podium to address Woods’ question. There’s no one more committed than Avalon to expanding affordable housing in this community, she said. But the issues of density are real, and they struggle with them. They have a full wait-list for both single residents and families, McCabe said, but they had limited options at this location.

Jean Carlberg said that one troubling aspect is the relocation of residents in one-bedroom apartments – only six of the 21 tenants will be able to move back in, she noted. She asked for more details on the relocation effort, and whether for some tenants, their relocation would be into permanent housing.

Because the project is federally funded, they are bound by the Uniform Relocation Act, Appel said. They have to work with tenants to find new housing, pay for their moving expenses, and provide a subsidy for the new housing for up to five years. [These costs are built in to the project's estimated $8 million budget.] The office of community development is helping with that process, he said. They anticipate that many of the current tenants will apply to return when the 1500 Pauline is rebuilt, about 18 months from now.

McCabe added that they have a team offering support services, and they’ll be very involved in the relocation process. Within the affordable housing stock that Avalon oversees, they have more one-bedroom units than two- or three-bedroom units, she said.

Evan Pratt clarified with planning staff that the current complex is non-conforming to zoning on that site – that is, it has more units now than the existing zoning allows. In contrast, the number of proposed units does conform to zoning there. [The site is zoned R4B, for multi-family dwellings.] He also pointed out that the Near North project was a planned unit development (PUD), which allows for greater density.

Kirk Westphal said he hoped everyone would agree that the site should be redeveloped, rather than lose available funding – that perspective caps his comments a bit, he said. In general, given the context of the site and the city’s master plan, the commission would be amenable to PUDs, especially for affordable housing projects.

Westphal took issue with the link between density and safety problems, noting that in many cities there are neighborhoods with higher density that are quite safe. His understanding was that for this site, the issue was more related to a staff-resident ratio.

He said he liked the new design – the old building layout was outmoded. He clarified that the proposed playground is technically a public one, then questioned how the public would know that, given that there’s no sidewalk planned from Pauline to the playground. Would there be signs?

Planning commissioner Erica Briggs, left, talks with Chris Cheng of the Ann Arbor planning staff before the commission's Jan. 20 meeting started.

Chris Cheng of the city’s planning staff said they expected the playground to be used mostly by residents, and that they hadn’t discussed signs or a sidewalk. Erica Briggs concurred with Westphal that it would be more inviting to the general public if a sidewalk were installed from Pauline. Carlberg observed that people would end up creating a path themselves, so Avalon might as well put one in where they wanted it.

Briggs also asked about the neighboring park, noting that in the summary of comments from the community/resident meetings that Avalon held, some people had noted that they didn’t find it safe, and that there are flooding problems there. Cheng said they’ve talked with parks staff about improving the paths in Fritz Park, but it’s not connected with the site plan.

Briggs then asked Avalon to clarify the difference between affordable housing and supportive housing. Wendy Carty-Saxon explained that 35% of the units in the new project would be set aside for supportive housing, with Avalon providing services to tenants, depending on their needs. Often they end up reaching out to other tenants as well, she said. When Briggs began to pursue that line of questioning, Eric Mahler – the planning commission chair – cut her off, noting that they needed to focus their deliberations on issues related to the site plan.

Diane Giannola said she supported the project, and that it would be a benefit to the neighborhood.

Mahler also expressed support, but said the proposal seemed short on details about the design. David Esau of Cornerstone Design, the project’s architect, said they wanted to keep it in scale with the neighborhood, with one- and two-story buildings. They haven’t signed off on all the materials, but it would be largely brick and siding – standard residential construction, he said – and would meet the city’s new energy code.

Outcome: The planning commission unanimously recommended approval of the 1500 Pauline site plan. It will now be forwarded to city council for approval.

Phi Kappa Psi on Oxford

The University of Michigan chapter of Phi Kappa Psi is requesting site plan approval and a special exception use for a property at 630 Oxford, between South University and Hill. The house is now a rental duplex, allowing for up to eight occupants. The special exception use would allow for a fraternity to occupy the building, with a maximum of 47 occupants, based on the size of the lot. The fraternity is requesting permission for up to 24 occupants, including a resident director.

The site plan calls for 10 parking spaces in the rear of the lot, though that number may be revised. Planning staff has asked for more information and changes to the plan, and recommended postponement.

Phi Kappa Psi: Public Hearing

Six people spoke during the project’s public hearing, including two people representing Delta Gamma, whose sorority house is adjacent to the site and who oppose the project.

Allan Lutes of Alpha Management Group spoke on behalf of the owners. [The owners are listed in the site plan application as BH630Ox LLC, at 2112 Vinewood in Ann Arbor, where Big House Rentals is located.] This isn’t a project that was prompted by seeing a For Sale sign, he said – they carefully selected this site, considering the neighborhood and the city’s master plan, he said. They feel the site plan is consistent with the area’s zoning, and they won’t need variances.

It’s in a neighborhood that already includes many sororities, fraternities and University of Michigan housing, Lutes said. The plan is to preserve the building’s outside architecture, and to add additional screening to buffer it from neighbors. They plan to use the basement as their “gathering space,” Lutes said, for minimum impact to the surrounding houses, adding that it “at times may get a little loud.” He noted that they have letters of support from five neighbors.

Saying he’d been on the fraternity’s alumni board for 15 years, David Frayne told commissioners that Phi Kappa Psi had the simple goal of obtaining permanent housing. Though the fraternity had been at the University of Michigan since 1876, they are currently leasing a house on South State from another fraternity, he said – it’s an older building, and not adequately maintained. They look forward to having a house that members can be proud to live in, Frayne said, adding that the project has support from the local alumni network. They’re making provisions to have a resident director on site, and intend to maintain the character of the house and the integrity of the neighborhood, he said.

Mary Higgins identified herself as the house director for the Delta Gamma sorority, a position she’s held for 12 years. The sorority’s house is located just north of 630 Oxford. They are opposed to the project, she said, though they don’t oppose the fraternity itself. It’s a quiet neighborhood, and what they object to is the fraternity culture, Higgins explained, adding that she was also speaking on behalf of the Knight-Wallace Fellows, a journalism program housed at 620 Oxford. The street is narrow and can’t accommodate more cars, she said. Higgins also cited concerns about garbage, noise and “loud and unruly parties,” adding “we do not look forward to this move.”

Phelps Connell said he was a board member of a fraternity in the neighborhood, and that they welcomed the arrival of Phi Kappa Psi. His board supports the site plan, Phelps said. He didn’t identify which fraternity he represented, but said the chapter had been in its location in the Oxford neighborhood for about 100 years – though “I haven’t been on the board that whole time,” he quipped.

Saying he was there representing the undergraduates at Phi Kappa Psi, John Gray – a senior majoring in business – defended the character of the fraternity. He cited a list of honors that the chapter had received. Members strive for excellence in themselves and their community, Gray said. He noted that they had been paired up with Delta Gamma for a social event last year, “and got along with them quite fine” – a comment that elicited laughs from others in the room.

Carol Makowski, chair of the alumni board for the Delta Gamma sorority, told commissioners that they should find out whether Phi Kapp Psi was planning to have an on-site resident director. That could change the character of the house, she said.

Phi Kappa Psi: Commissioner Deliberations

Eric Mahler, the commission’s chair, began by noting that if the project is postponed, anyone who spoke at the public hearing could speak again at the project’s next public hearing.

From left: Planning commissioners Wendy Woods, Diane Giannola and Erica Briggs, and Wendy Rampson, head of the city's planning staff.

Jean Carlberg commented that one of the standards for granting a special exception use was that the project “will not be detrimental to the use, peaceful enjoyment, economic value or development of neighboring property, or the neighborhood area in general.” She hoped that a resident director would be a “bonifide adult” who would be on site at all times.

Allan Lutes of Alpha Management Group responded, saying that the alumni group has every intention of having a live-in advisor who’s not an undergraduate. They plan on building a private two-room suite at the back of the house for that person. As for concerns about fraternity culture, he conceded that there have been some stupid and foolish acts at fraternities, and it’s hard to counter a cultural conception based on “Animal House.”

He noted that this fraternity employs his professional management group to oversee the facility, and his staff would be at the house several times each week. In addition, unlike some fraternities, Phi Kappa Psi is a member of UM’s Interfraternity Council. The IFC has standards of behavior that, if not adhered to, result in sanctions, Lutes said, like social probation.

Carlberg raised another issue: Did they have sufficient parking spaces for 24 residents? Lutes said that zoning requires even fewer spaces than the eight they’re proposing. At their current location, he said, there are 31 residents and 10 spaces, so they’re estimating that eight should be sufficient.

Evan Pratt noted that having a resident director wasn’t written into the special exception use – Wendy Rampson, head of the city’s planning staff, said it wouldn’t hurt to make that explicit. Pratt then asked whether there would be any bedrooms in the basement, in addition to the common area. They might put in two bedrooms there, Lutes said. When Pratt observed that the house was relatively small for 24 residents, Lutes said the “occupant load” reflected how students preferred to live – in singles and doubles – and was lower than what was permitted by city code.

Wendy Woods said she was glad they planned to postpone action, because there was additional information needed. It would be helpful to see the proposed floor plan, for example, and to find out what maximum occupancy was allowed for parties. Occupancy is dictated by the fire code – Rampson said they could get that information for commissioners.

Woods also asked whether residents had been notified about the proposal, and what kind of input they’d given. Lutes reported that they had distributed letters to residents within 500 feet of the parcel, providing the full site plan and contact information. They hadn’t been contacted by any neighbors, and only one person had attended the meeting, representing the Oxbridge Neighborhood Association. Lutes characterized her opinion of the plan as neutral.

The representatives from Delta Gamma told commissioners that they hadn’t received the mailing.

Outcome: The planning commission voted unanimously to postpone action on the 630 Oxford site plan and special exception use.

Present: Erica Briggs, Jean Carlberg, Diane Giannola, Eric Mahler, Evan Pratt, Kirk Westphal, Wendy Woods. Also: Wendy Rampson, head of the city’s planning staff.

Absent: Bonnie Bona, Tony Derezinski.

Next regular meeting: The planning commission next meets on Tuesday, Feb. 1 at 7 p.m. in the Washtenaw County administration building’s boardroom, 220 N. Main St. [confirm date]

b. CONS
i. Potential neighborhood opposition
ii. The City will need to secure the site if it is not currently owned by the City

I think it’s premature at this point to assume that neighbors have made up their minds that they’re opposed to construction at any one of the three sites that have been suggested along the block of Fourth Avenue roughly between Ann and Catherine streets. But who are these neighbors, who have a stake in an area that would change through the addition of 60 or more units of affordable housing?

In part they’re business owners. Taking a look at site C on the corner of Fourth and Catherine, a building of substantial size would necessarily block the visual approach to Braun Court from the south. While it’s possible to imagine a building design for the affordable housing that would afford sight-lines from the south to Braun Court, a design of that kind is likely inconsistent with the “plain vanilla” approach that is forced by the economics of funding. So it’s understandable that business owners in the area are going to have questions and concerns that need to be addressed – not just about site C, but the others as well. From what I understand, the topic has already generated discussion at a recent meeting of the Kerrytown District Association.

And the neighbors are in part just plain neighbors, that is, residents. This is a point that Christine Crockett, of the Old Fourth Ward Association, made in conversation after the Dec. 8 council working session. There are people who live proximate to the area under consideration, and those residents, she said, need to be looped into the conversation. Engagement of the public is something that Jayne Miller, director of community services for the city, has indicated as a next step.

And the neighbors are in part judges. Like, for example, Judge David Swartz, who sits on the 22nd Circuit Court housed as part of the Trial Court in the Washtenaw County Courthouse. Swartz was recently re-elected to that position in November, with the support of 36% of voters who made a choice in that election. (Candidates Shelton, Swartz, Shapiro, polled 43%, 36%, and 21% of the vote, respectively, with incumbents Shelton and Swartz enjoying the benefit of ballot designation – under their names on the ballot is printed “Judge of the Circuit Court.”

Among the three sites that were a part of the staff presentation to city council’s working session a week ago is site A on the southwest corner of Fourth and Ann, which is part of a parcel owned by the county. It’s current use is as a surface lot with underground parking spaces. It’s adjacent to the courthouse building where the 22nd Circuit Court is housed.

It turns out that Judge Swartz has formulated an opinion on the use of that site for supportive housing, which he expressed in an email sent to various parties, including all members of the county board of commissioners:

As we explained in our informal meeting a couple weeks ago, construction of this proposed structure in the courthouse parking lot site will be adamantly opposed by the judiciary, at both the local and state level. In addition to many other concerns, construction on the courthouse site would violate basic security principles that the county is already familiar with from prior county courthouse architectural studies. This is a matter of concern for the public safety of people who use the courthouse as well as for the occupants of the proposed housing. Locating such housing above and within 30 yards from the only point of entry for charged and convicted felons being transported from the jail or prison places everyone involved at risk. If the City truly believes that location of replacement Y housing on a courthouse site is appropriate, perhaps it [sic] they can incorporate it in the site and architectural planning for the new 15th District Courthouse facility which they are constructing [emphasis added].

I know I do not need to remind the City of the Court’s function as a separate and independent branch of government with the responsibility to provide safe judicial services to the public. We have advised the Supreme Court and the Supreme Court Administrator Office of the City’s suggestion for this project as it relates to the courthouse. If this project goes to the next level the Supreme Court will be involved and we will invoke the available procedures in opposition, including litigation if necessary.

Let’s ignore the sarcasm invoked by Swartz as a rhetorical flourish (and italicized in the passage above for easy identification by Chronicle readers) to focus on the one actual concern that is addressed in the above blockquote of judicial bombast: public safety. Locating supportive housing in this location, Swartz contends, puts people’s safety at risk who use the courthouse. Why? Unless Swartz is ignoring councilmember Leigh Greden’s good-sense admonition made at council’s working session against “the assumption that this is a population of troublemakers,” it’s difficult to see the case for that claim.

Swartz also implicates that residents of the proposed supportive housing are at risk to their safety – from prisoners being transported to and from the courthouse. To make that case, Swartz has some additional work to do: show that residents of supportive housing at that location are at extra risk – more so than the current users of the surface parking lot at the same site, for example – than other groups, due to the fact that charged and convicted felons are transported from the jail to the courthouse.

The supporting material that Swartz copied and pasted into his email is excerpted from the Supreme Court Administrator Michigan Court Facilities Standards and includes the following:

Section 2.

The courthouse interacts on a daily basis with incarcerated defendants from the jail and with the public. For efficient operations, the courthouse site should be located in a location convenient to the public and to the jail. (If video technology is used to minimize inmate transport to the court, proximity to the jail becomes less important in selecting a courthouse site.) The site must permit secure access for detained offenders through a vehicular sally port that will not be entered by the public or the judiciary.

Section 2.4 includes the following admonition:

The design of the courthouse needs to reflect the separate and constitutionally independent status of the judiciary as a separate and equal branch of government. Even when located within a larger county government center the image of the courts as separate and equal need to be maintained. The temptation to cheapen the significance of the courthouse by treating the courts as just another “county department” needs to be avoided.

2.4.1 Accessibility

The courthouse exists to serve the public and must be easily accessible to those who require its services. Both inside and out, the courthouse must be designed to handle large numbers of visitors. These will include those coming to trial, the media, staff working in the building, witnesses and attorneys associated with cases, citizens coming for information or to file complaints, and those coming to pay fines or other payments. Ample public areas must be provided both inside and outside the building to make access as easy and comfortable as possible and to maximize the speed at which the public can be served. Because the courts are a government agency, service should be expedient and simple to combat the stereotype of bureaucracy. Accessibility should be designed with public service as the primary goal. This concern extends to the public spaces devoted to security and weapons screening. Sufficient space needs to be provided to permit easy and quick access to the building.

2.4.2 Parking

Ample parking must be provided within easy walking distance of the courthouse for judges, staff, jury members, law enforcement officers, and visitors. In an urban setting, public parking may be provided nearby in public ramps or garages. If not, the courthouse may provide public parking on site, either in open lots or in parking structures adjacent to the building. If the courthouse is collocated with a jail or detention center, the demand for parking is greatly increased due to jail shift changes and visitors. For security reasons, no public parking should be provided within or under the courthouse. If possible, public parking should be free and near the courthouse. An estimate of the number of parking spaces needed should be completed with the building program or needs assessment. This estimate will include those coming to court, those coming to pick up information, and those requiring any other services housed in the same building. Generally for public and judicial staff parking, there should be one space for every four (4) seats in each courtroom, and one space for every 250 square feet of office space (some jurisdictions have different square footage requirements or recommendations).

If jury trials are held in the courthouse, additional parking spaces (up to 50 per jury called) will be required on days when juries are called. Sufficient parking should be available to permit jurors to park and access the courthouse quickly and easily. To ensure sufficient public parking for jurors, a “juror only” area can be created in a large parking lot, or special parking permits can be handed out to permit jurors to park in unassigned staff spaces. If jurors are required to park in a parking structure, parking fees should be validated by the Courts.

A separate secure parking area should be provided for judges. This parking area should be covered and screened by a wall or fence, if possible. Security cameras should be used to monitor activity in this area. A protected entrance with punch-code or card access should provide limited entry to the courthouse. Courthouse security staff should be located close to this entrance, either inside or outside the courthouse. This parking area can also be used by the bailiffs for an additional security presence. If possible, separate staff parking should also be provided. This parking area can be located close to a secure building entrance for staff, or staff could share the judges’ entrance.

All parking areas should offer ramped walkways to the courthouse for wheelchair or handicapped access. Outside public entrance doors should be equipped with automatic opening devices. Handicapped parking spaces for the public and judicial staff should be provided as near an accessible entrance to the courthouse as possible.

In all of this material quoted from facilities standards, I can discern no additional information that bears any relevance to the question of the appropriateness of sites A, B, or C for construction of supportive housing.

However, in emphasizing the section from 2.4, which is repeated here for readability, I think Judge Swartz identifies the source of his actual objections: “Even when located within a larger county government center the image [emphasis added] of the courts as separate and equal need to be maintained. The temptation to cheapen the significance of the courthouse by treating the courts as just another ‘county department’ needs to be avoided.”

Swartz’s objections, I think, have something to do with image. A supportive housing facility located in such close proximity to the courthouse doesn’t project the right image, somehow. If that is the nature of Swartz’s objections, then for my part I have to say that they have no merit.

As the discussion moves forward and the public is engaged, I would encourage Judge Swartz to participate in any public forums that might be offered to explain the analysis of the three sites. It’s important that residents, business owners, and people who work at those businesses – like waitstaff and servers at bars and restaurants in the area – as well as public servants like Judge Swartz, give their feedback to city staff.

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

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

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

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

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

Brief background

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

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

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

December 2007 to May 2008

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

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

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

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

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

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

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

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

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

Presentation by Staff to Working Session

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Council Discussion

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

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

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

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

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

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

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

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

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

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

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

Clarifications and Reactions

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

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

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

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

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

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

Absent: None

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

Site A: Fourth & Ann streets, looking southwest.

Site B: Fourth & Catherine streets, looking southwest.

Site C: Fourth & Catherine streets, looking northwest.