Arbor Update

Hmmm, looks like Broadway Village will be an offshoot of the medical campus. That isn’t a bad use for that area, but it sure isn’t what was originally proposed. Will it have to go back to Council or is it a done deal now that they have the 75% retail occupancy? Mostly it will be nice to have something there. It looks very sad now.

You mean in that it has medical groups as the anchor tenant? They still have all of the other proposed uses – housing, retail space, etc. Though, comparing the square feet in the News today with their website, it looks like these “health care groups” are replacing not just the hotel and health club, but also some of what was originally intended for other commercial uses.

I guess I would have preferred they stick to trying to get a hotel in the mix, which the article seems to indicate is an option, and in general as broad a mix as they were shooting for, but, having lived in the area for the past several years, I’ll be glad for this to go in as it’s now described – replacing the old Kroger with anything will be good, and hopefully putting all of this there will make the area less of a graveyard after rush hour than it is now. (The health care offices won’t help with that much, I guess, but the apartments and restaurants should?)

From the article, it sounds like Council has to review and approve the prelease package regardless of who the tenants are.

This is the second time that the developer has claimed he has met the 75% pre-leasing requirement. Last June (the first time), the City Attorney shot him down, pointing out that the proposed anchor tenant consisted of backers of the development.

We’ll have to see what the City staff says about this package of leases. I expect it will be a couple of months before Council does anything one way or another.

Huh.

Well, I didn’t know about the hotel, but I’m glad it’s out of the picture now.

I’d say it looks more than a little bland, but agreed, better than an abandoned parking lot.

It’s so short and bland!
But by Christ, I hope this means we get a decent bar in the neighborhood.

Sorry JS, looks like you are getting a “Gilbert & Blake’s Seafood and Steak Grille,” a Michigan-based chain(?) started near Lansing. Some details are in this article. My favorite quote from this article: “It is a prototype for what we hope will be a chain, and what better place to develop that than right next door to Michigan State?” said Morris Huntley, vice president of operations for DMA Food Group. Yeah, what better place?

It probably won’t have everything that everybody wants out of it, but there are lots of other vacant or mostly-vacant lots in the neighborhood whose owners might be spurred into doing something once this goes forward.

Yeah, that’s what I need. Another HP Pickleshitter’s in the neighborhood.

I agree with Julie that the current set off tenants is far less attractive than the original proposal. It appears that the tenant list is moving further and further from amenities that benefit the local neighborhood. Perhaps TPM is right that the development of nearby lots spurred on by this project will provide a corner grocery or a corner bar. Shoot, folks over there would be happy to get even a mid-block grocery. However, I think “replacing the old Kroger with anything will be good” is going a bit overboard.

I have a couple questions about the article:

“Strathmore has also agreed to pay the city $500,000 annually for 30 years following construction.” What is this about? The article just leaves this figure hanging.

Is medical considered “commercial”? I thought it was “office”.
If it is better described as office space and the parking demand for office is about 4 spaces/1,000 square feet, then this UM extension will consume more parking than is provided on-site. Considering all of the fantastic transit and NMT improvements that are part of this development plan (none), I predict an application for a new Residential Parking Permit program on Broadway will be submitted in the near future.

Is there any info on traffic studies done in conjunction with this proposal? I know that the Braodway neighborhood was concerned about the amount of traffic that would be flying up and down the hill, resulting in the irritating, ineffective, and eventually crumbling speed bumps on Broadway. I would think that all this office space is going to have a significant impact on the already heavy rush hour traffic at this junction.

And finally, “It will also include a national coffee shop whose name has yet to be revealed.” This is a real nail-biter! Will it be Starbucks? Will it be… um, a national coffee shop that isn’t Starbucks? I’m at the edge of my seat!

That’s an interesting point you make about parking, Scott. Office uses are among the most parking-intensive uses there are.

This project didn’t have enough parking with its old mix of uses. I shudder to think what will happen if all these offices come in.

Broadway is already completely parked up during the daytime. So there will just be no place to park for the patients coming to see these doctors.

Patients don’t need to park – walking is good for their health!

It is a shame that this development is moving more towards national tenants. I know that having primarily local businesses was a goal of Peter Allen, but I guess without him Strathmore went for the whoever-will-give-us-the-most-money option. Or possibly, the whoever-will-prelease-this-far-in-advance option.

“Perhaps TPM is right that the development of nearby lots spurred on by this project will provide a corner grocery or a corner bar. Shoot, folks over there would be happy to get even a mid-block grocery.”

There are actually two small groceries there already, though I don’t find them a subsitute for something like the old Kroger. It’d be interesting to know what the impact (positive or negative) might be on them.

“Considering all of the fantastic transit and NMT improvements that are part of this development plan (none)”

Well, the best way to ensure good transportation is to build in a place where the transportation situation is already pretty good. This site is on a couple bus routes, in walking distance of downtown, the medical center, etc., in addition to being on a major road (Plymouth). Seems like a pretty good location to me.

A package submitted to the City exactly three years ago today called for 729 parking spaces, 640 of which were to be in a 6-story parking structure.

Based on the proposed uses at that time, this amount of parking was not sufficient, considering both the City’s code requirements and a substantial reduction in parking according to the national standards for shared parking.

I talked to Donna Johnson, the planning staff person on the project at the time, and asked her what had happened. She said that the developer had submitted its own shared parking analysis, and that the City had accepted it without confirming that it was valid.

If and when the developer submits the new package of leases, and if and when the new site plan is submitted showing offices instead of a healthplex, I will re-do my analysis.

In perusing the city code, I found that medical and dental offices and clinics have a specific parking requirement of 1 space per 150 square feet of floor area. That means 1133 parking spaces would be required just for the medical offices for this development. Perhaps some of the office space would be categorized as general office space. With a 50/50 split, the good doctors would require 825 spaces. If these are provided in the structure, that raises the height to 8-11 stories. Thank God you can’t see Lowertown from the OWS.

I just received a copy of a three-page letter dated May 17 which Stephen Postema sent to the lawyer for the developer. The letter is reported in today’s issue of Ann Arbor Business Review. Can someone link the article here?

The letter is a classic in its field. Postema says that the developer has met the 75% pre-leasing requirement, but he raises a bunch of new issues. I have the letter as a .pdf file. Can someone tell me where to e-mail it so that it can be linked here also?

Some issues mentioned:

** The letter says the developer has “only recently started to provide” a bunch of project information necessary for the City to adequately perform its due diligence. With regard to a recently-provided project schedule, Stephen says his first look “has disclosed not only that numerous items are already behind your projected dates to the City for implementation, but that the projected completion dates for such items are clearly understated, in some cases by what would appear to be a large margin.”

** Stephen said that the developer has “only this past week submitted its proposed administrative amendments to the PUD/site plan.”

**The developer plans to move the construction of the big building (Building A) to phase 2. “This change is troubling to the City, insofar as the City’s underwriting of the Project, and analysis of the feasibility of the proposed bonds, are inextricably linked to the lease-up and timely completion and occupancy of Buiding A, whch repreent the lion’s share of the pre-leasing required under the Minimum Lease Commitment Requirement.”

** “The City needs further information about the environmental issues in this case. The DEQ already denied the remediation permit you submitted.”

Postema suggested a meeting for May 26 at 8:30 a.m.

A double super-secret meeting?

The article David mentions: City raises issues with Lower Town developers

Stephen came up to me at the Bar dinner this evening. He said that the City Council might do something on starting the process for issuing bonds at either its June 5 or June 19 meetings; the bonding process (which involves an independent investigation by outside bonding attorneys) will run parallel with the City’s own continuing study of the project.

I asked if the proposed doctor tenants were real. Stephen said yes; he had gone and visited them.

Earlier this afternoon, after I got his letter to the developer’s lawyer, I made a FOIA request for all the materials mentioned in the letter. Stephen said that a lot of materials would become available in the next month. He said he did not want to release the rental rates in the proposed leases. I said that I didn’t want to see them, anyway.

I think it will be several more months, at the very least, before City Council will make a decision one way or another. The developer certainly has a long and difficult way to go, with all these new issues.

I heard that with the Kingsley Lane project going back to raise the ht of their building and being approved, and many towers planned by the University on Wall Street, the Lower Town developers are in the process of going back and asking for more. This time it will be 10 stories! Finally some sanity.

Interesting news, Edmund! What’s your source? Got any more details?

UM is going to be reworking some of its land in the Wall St. corridor, and part of that redevelopment is going to include the construction of a transit center (with integrated retail space, enclosed waiting areas, etc.)!

Perhaps after this city sees this type of TOD in operation, we can begin to focus less exclusively on parking-oriented development solutions.

I just got a copy of the May 10 proposed administrative site plan amendments. There is no mention of a proposed increase in any building heights. There are small increases and decreases in building square footages.

There are significant changes in proposed building uses, the net effect of which seems to be an increase in multi-family residential, retail and medical office, and the elimination of the athletic club and hotel.

All the smaller buildings would be built in phase 1; the biggest one (Building A, which used to be the athletic club and hotel) would be built in phase 2.

Check out item D-28 on the June 5 agenda. It is a very cautiously-worded resolution directing that the staff publish a “notice of intent” to issue the bonds for this project. The resolution points out that there are a variety of conditions yet to be satisfied before the bonds can be issued.

Curiously, the notice of intent itself doesn’t mention any of the conditions. I hope that, if Council later decides that these conditions have not been met, the developer can’t argue that the unconditional notice means that the City has to issue the bonds.

I’ve mentioned this problem to Stephen Postema.

A group calling itself Citizens Advocating Responsible Development (CARD) started a petition drive yesterday to force a referendum on the $40 million in bonds that the City would have to issue in order to make Broadway Village a reality.

Under state law, the petitioners have 45 days from June 18 (when the notice of intent was published in the AA News) to gather a bit more than 9,000 valid petition signatures.

This method worked last year to stop the issuance of bonds for the County’s expanded jail.

The group says it thinks the public should vote on whether or not to give $40 million to a private developer.

“The group says it thinks the public should vote on whether or not to give $40 million to a private developer.”

Meanwhile, the public wonders why this group is writing about itself in the third person…. (And in what sense this $40 million is a “gift”.)

(“third person”: bravo, Bruce.)

Meanwhile, Ann Arbor voters might wonder why vacant strip malls that are anxiety-producingly dead, even for the 20-something male pedestrian, by 9 pm are considered “responsible” to keep around.

Ann Arbor voters might wonder why a $40 million dollar expenditure can be considered “giving” if the $40 million won’t exist unless the development happens – which it, and more, won’t.

Ann Arbor voters might also wonder why allowing toxic concentrations of noxious dry cleaning chemicals to continue wending their way into the Huron River is considered “responsible”.

Ann Arbor voters might finally wonder why they are letting themselves be fooled by such shallow uses of modifiers like “responsible”.

(This one is forced, at this point, to speak in the third person when discussing Ann Arbor voters – my new address, in the 48197, makes me part of a vox populi that would no doubt happily take Broadway Village, and the tax revenue it would bring.)

Sure, the $40 million is a gift to the developer. The developer doesn’t have to pay it back. Instead, the property taxes are supposed to pay the $40 back – with interest. The total amount to be paid back, including interest, will be at least $80 million.

Cleaning up the remnants of a dry cleaning operation will cost $4 million, and the city already has a grant for $3 million. So going through Rube Goldberg financing, and building a $185 million project, to do this small cleanup is a bit bizarre.

I just talked to a petition circulator who was at the Farmers Market. She said that of those who said they were AA voters, about 90% signed the petition.

So there is a lot of public concern about the proposed subsidy to a private developer.

The developer doesn’t have to pay it back. Instead, the property taxes are supposed to pay the $40 back – with interest. The total amount to be paid back, including interest, will be at least $80 million.

David, you’re contradicting yourself.

Group Starts Petition Drive On Broadway Village Bonds

For Immediate Release June 26, 2006

A local citizens group has launched a petition drive to force a vote on the Ann Arbor city government’s plan to issue $40 million in bonds to subsidize Broadway Village, a private development to be located at Maiden Lane and Broadway.

The group, Citizens Advocating Responsible Development (CARD), is using a feature of state law which allows citizens to petition for a referendum before a local government can issue bonds. A similar law was used successfully last year to block the issuance of bonds to expand the Washtenaw County Jail.

The group is required to gather slightly more than 9,000 valid signatures by August 1. If the petition drive succeeds, then the city could not issue the bonds until they are approved by the voters at an election. Last year, the County Board of Commissioners dropped the idea of an expanded jail rather than put the issue on the ballot.

Laura Strowe, a spokesperson for the citizens group, says “The project is supposed to cost $185 million, and the city has to issue the bonds because the developer can’t get private funding for the entire amount. The city should not subsidize a project that the banks won’t completely fund.”

If the project succeeds, the property taxes on the project would pay back the bonds, both principal and interest. The total amount paid would be at least $80 million over 30 years. This $80 million would not go to the local units of government that would ordinarily receive the property taxes. It would, instead, go to the bondholders.

CARD is worried that the project will not produce enough tax revenue to make the bond payments. In that case, the city government might have to pay back the bondholders from tax dollars received from citizens, instead of just tax dollars from the project.

“Times are tough in Michigan,” said Lou Glorie, a fifth ward petition circulator. “Now is not the time for the city government to gamble on a risky development.”

Strowe said that in the first day of petitioning, about 90% of registered voters with whom she talked signed the petition.

For further information, or to circulate a petition, contact: Laura Strowe, 665-8980.

Paid for by Citizens Advocating Responsible Development, 1327 Broadway, Ann Arbor, Michigan 48105

That’s quite a bit of passive voice.

“CARD is worried that the project will not produce enough tax revenue to make the bond payments.”

Ok, I’ll bite. How much are the bond payments Mr. Cahill?

“Ok, I’ll bite. How much are the bond payments Mr. Cahill?”

Why am I starting to get the feeling that you and your group has no idea how much the bond payments run?

Shouldn’t CARD have this number at the ready if they are “worried that the project will not produce enough tax revenue to make the bond payments”?

This is beginning to look suspiciously NIMBY, Dave. Let’s see the numbers.

In 2003 and 2004 there were “prospective appraisals” by the City and County that showed the project would be worth far less than the value necessary to generate the taxes to make the bond payments. (The project had to be worth $80,000,000; both appraisals came in at $65,000,000.)

Recently the Assessor told a secret City staff team that a new appraisal would be even lower. We’re waiting for the new figures.

You didn’t answer my question. How much are the bond payments?

...and “secret City staff team”??

Please focus on this, todd: The issue is whether or not the taxes will cover the bond payments. So far the answer is no, they won’t. I don’t have figures at hand; the latest set is in the hands of a CPA.

Yes, “secret City staff team”. I’ve got 13 pages of minutes from this staff team’s meetings, which were unknown to the public until the July Observer revealed the team’s existence.

The relevant staff team meeting was on June 2. On June 5, Tom Crawford, the City’s CFO, told Council that the taxes would not cover the bond payments.

Taken from your own press release, Dave:

Post #29: If the project succeeds, the property taxes on the project would pay back the bonds, both principal and interest.

See why I’m asking questions? So which is it? Will the project pay off the bonds, or not?

More importantly, since math is clearly not your strong suit (nor is it mine), can’t you be kind enough to tell us how much the bond payments are, and when the payments are due? I know you have the numbers somewhere.

This isn’t very complicated. If the bonds won’t be covered by the new taxes, we need to understand by how much, and evaluate whether or not this is a good idea.

However, if, as your own press release claims, the bond issue will be covered by the new taxes, then aren’t you putting up a bit of a straw man??

......and Dave, if the taxes really don’t cover the cost of the bonds, and by a material amount: guess what? I’m probably on your side.

So, out with the numbers, please.

Todd, ask your City Council member what s/he knew about the secret City team meetings and when s/he knew it.

If the project does not succeed – that is, if the taxes are not high enough to pay off the bonds – the City’s general fund could take a big hit.

From what I know, the storm signals are flying at the staff level about the taxes and the bonds. That’s good enough for me to support the petition drive.

I have figures on the bond payments from three years ago somewhere in the huge pile of Broadway Village materials rotting in my study. But the project’s cost has grown dramatically – from $120 million to $185 million – so what I have won’t help.

I assume you will join me in signing the petition, so that we can have an informed public debate about the project’s funding, and an informed vote.

Wouldn’t it be better to devote the considerable time and energy of the members of CARD, the City, and the developers to help to make this development the best it can be, rather than find the ways to block it? It kills me to drive by the bombed out remains of what used to be a thriving, interesting, useful part of town. I spent a lot of time in this area as a child and teenager and hope to someday see it become something at least as good as what used to be there.

“Wouldn’t it be better to devote the considerable time and energy of the members of CARD, the City, and the developers to help to make this development the best it can be, rather than find the ways to block it?”

Yeah, well, this is where acting in a disingenuous manner gets Dave into trouble. If all that CARD was doing was ensuring that the tax math behind this project was on the up and up, then the fine folks at ArborUpdate would be behind them.

Obviously, now that I’ve asked a few mind-numbingly simple questions, we see the CARD has no interest in the math. They don’t even know how much the bond payments are going to run, and their own press release contradicts itself on whether or not this project will pay for the bonds.

CARD’s mission, obviously, isn’t to make sure that the math works. Their mission is to send a confusing message to potential petition signers, so that they can “Vote” (ie, vote no) on whether or not this large project will be built.

JulieW is indeed correct that the logical course of action for CARD is to work with the city to ensure that the bond math is correct. Unforunately for Dave, her “weasel-o-meter” picked up the same readings that mine did: CARD wants to block this project. Period. Why else would they want to submit this to a vote?

Dave, if Karen didn’t already win the “Selfish Twit of the Week” on another thread, you’d be the proud owner of a Disney soundclip.

I am sure you are disappointed. Maybe (probably) next week…..

This sounds fishy.

David: “I have documents showing that the taxes from the project will not be enough to make the bond payments!”

Todd: “Oh, really? Let’s see the numbers.”

David: “Let’s sign this petition so that we can get some information about about the bond payments!”

It seems to me that if CARD had copies of secret documents from the city, then it would be in their best interest to offer them up at the start, rather than claiming to have them but refusing to offer any proof. Yawn.

“Yes, “secret City staff team”.”

What? They don’t have a public announcement every time a group of city employees gets together to discuss a city issue? I’m shocked.

In 2003 similar meetings, of a committee created by Council, were open to the public. These latest meetings aren’t.

I, too, would like to see something decent in that space. However, Broadway Village isn’t that project.

I have a .pdf file of the minutes of the secret city team. I’ll e-mail them to Juliew. She should feel free to put a link to them here. Then what you can read yourselves what the Assessor’s Office is saying.

Yes, there certainly is something fishy going on here!

“I, too, would like to see something decent in that space. However, Broadway Village isn’t that project.”

And there we have it, ladies and gentleman. It’s kind of like getting a five year old to sheepishly admit that he’s the one who ate the cookies.

I’m completely surprised that Dave has no idea how much the bond payments will run. This has nothing to do with bonds: who could have guessed?

Am I the only one who finds it ironic that Dave is complaining about the City being secretive and disingenuous, and then in the very next breath…...

I love Dave’s math. He states that since the cost of the project has gone from $120 million to $185 million, the previous financial projections are no longer valid. But if the math worked when the project was $120 million, why would it no longer work at $185 million, especially since the City’s share is still $40 million? True, the cost of the project doesn’t necessarily translate into future value. But unless there’s some significant additional cost that’s providing no value to the future bottom line, the fact that the developer is going to spend more on the project seems to bode well for a future value in excess of what the value was projected when the project was $120 million. I guess we’ll just have to wait on Dave and his supersecret documents.

David Cahill,

The Acrobat Reader has a ‘text-select’ tool that can be used to select text from a .pdf, copy it and paste it into the AU comment window. While possibly not practical for prodigious amounts of text, perhaps you could provide a preview of the most pertinent passages for people to peruse and ponder while the posting of the .pdf’s in their entirity is pending.

I’ve sent the .pdf off to juliew. I don’t think it’s practical for me to post excerpts from the minutes. Besides, those who are in the longest river in Egypt (“denial”) about Broadway Village’s problems would simply say that the excerpts were out of context. 8-)

The word of the city’s CFO that the taxes aren’t enough to pay off the bonds is good enough for me.

Meanwhile, the petition drive continues apace. Watch for us at the Top of the Park, at the Farmer’s Market, in movie lines – wherever Ann Arborites gather.

Interestingly, the largest number of our circulators are from the fifth ward, though the project is in the first ward. So this is, indeed, a city-wide issue.

“The word of the city’s CFO that the taxes aren’t enough to pay off the bonds is good enough for me.”

Terrific.

JulieW, if you have the time, can you please post the portion of the minutes that explains the tax and bond math?

You’d think that an organization (CARD) that is taking the time to circulate a petition decrying the lack of financial balance in this bond project would have the numbers that show this imbalance at the ready.

I guess that’s too much to ask.

Thanks, JulieW.

So Mr. Cahill, you actually trust a city official, the CFO? A quick read of the July Observer “Eyes on Lowertown” reveals that the city is quite on top of this whole issue. After reading it I have no doubt that they are taking great care and will not issue bonds beyond what the project can support. What makes you think otherwise? Some secret agenda? If so, what is it?

The citizens group thinks that subsidizing private development to this extent is a bad idea, even if there were no risk to the general fund.

Yesterday a petition circulator attended a meeting of influential Democratic women called the “Lunch Bunch”. People at the meeting did not want any explanations; they had already heard of the petition, even though it hasn’t got any media play yet – except here. (Hello, all you Lunch Bunch lurkers!)

They all signed the petition.

Up to now, the AU discussion has focused on the question of whether there’s a risk to the general fund, where that risk is defined by the difference between bond payments and revenue from property taxes. And that discussion has temporarily stalled on the question of what the actual numbers are.

But if the position of CARD is that the issuing of the bonds is a bad idea “even if there were no risk to the general fund,” it would be constructive for the group to advance an argument to this effect.

So Mr. Cahill, this is all about stopping the city from subsidizing the redevelopment of a blighted, paved over, polluted, vacant strip mall site, something that cities everywhere need to do sometimes and not about the fact that the site is just down the street from your house?

From the EPA’s P3 Success Stories: “As urban areas continue to grapple with the environmental and social consequences of sprawl, creative new plans to manage growth must be explored. The city of Ann Arbor, Michigan, has been battling urban sprawl for decades and is currently focused on revitalizing existing urban areas as a result of the city’s recent greenbelt initiative. The Lowertown neighborhood has been targeted as an area ripe for urban redevelopment. This area of the city has been underutilized for decades, yet rests within one of the most ideal and accessible locations in Ann Arbor. Over the past three years, business investment has slowly returned to Lowertown and citizens groups have begun to develop a master plan for this emerging neighborhood.”

“I, too, would like to see something decent in that space. However, Broadway Village isn’t that project.” David Cahill

Mr. Cahill the way I see it you are now firmly on the hook to describe your vision in detail. We all hate the NIMBY responses to progress that are couched in the specious argument that goes, “I am not sure what should go there, but that is not it.” Describe that ‘something decent’ that you see taking the place of the abandoned grocery and the parking lots. Help to build this process instead of just tearing it down. What will the people of CARD support?

It’s pretty fucking obvious what they’ll support. Doesn’t anyone else see it yet? They’re just greasing the skids in preparation of sliding the whole discussion into Greenway Eastside: The Sequel. Because why should such an amenity as an imaginary Greenway be limited to just one part of town? And why just a stream valley? Why can’t it pop up here and there, wherever it’s needed? After all, most rich people live on hills.

So just watch this discussion evolve. Pretty soon they’ll be speaking of the Greenway extension as though it’s been a forgone conclusion for years, something for which they were right on the verge of breaking ground when these pro-development maniac planners showed up and tried to ram condos down their throats. Just like Margaret had been out there in that parking lot for years, personally scrubbing up grease stains in preparation for the long-planned First and William Nature Preserve.

I was away from a computer yesterday afternoon so wasn’t able to do anything with the .pdf David sent me. I have now forwarded it to Murph so he can do his magic on it and post it.

This area of the city has been underutilized for decades
OK, so why is a grocery store, a laundromat, and several small locally-owned stores an underutilized use and a doctor’s office complex is not? Isn’t the former exactly what we would hope to see in a residential area. That is actually contributing to livability of an area. A lot of talk has gone into how this is such a great site and how people are vying for the opportunity to build here, but it has been demolished for over a year now and a viable project has been slow to materialize. So I guess I’m on both sides here. I really want to see something built here (especially now that everything has been demolished) and I didn’t mind the original mixed-use proposal, but I think the development and tenants currently proposed sells the history, the neighborhood, and the city short. Did the City make a mistake in marketing this site? Was the wrong group chosen to develop it? What exactly happened here and why? How can we make it better now without killing the entire project?

“The citizens group thinks that subsidizing private development to this extent is a bad idea, even if there were no risk to the general fund.”

Mr. Cahill, please inform the “Lunch Bunch”, as well as anyone else who is against private business “subsidies” (man, I HATE that word) that my business, as well as countless other local businesses in town, would never have opened their doors without an SBA loan that was guaranteed and therefore ‘subsidized’ by the good people of the State of Michigan.

This developer, a Michigan based business, is risking their capital to help clean up a Brownfield site, and bring high paying jobs to a centrally located part of town. Area restaurants and stores will benefit from this project, and when the bonds are paid off, the city will enjoy the new infastructure, as well as millions of dollars in tax revenue.

Cahill: “The citizens group thinks that subsidizing private development to this extent is a bad idea, even if there were no risk to the general fund.”

This is simply too funny for words. This group, hiding behind a bunch of bs about bond numbers is outed by the some moron (me) who asks one simple question: “hey, how much are the bond payments?” Revealing that they are circulating a dishonest petition (you should be embarrassed) that is nothing more than a NIMBY effort to kill yet another project.

You reap what you sow, Dave. Don’t ask for transparent government when you circulate a dishonest petition. The press release from CARD doesn’t discuss any other aspect of the Broadway Village project other than the bonds….and then you go on to say that CARD wants a vote “even if there were no risk to the general fund.” In other words, the financial solvency of the bonds aren’t at issue at all.

Way to go, Dave!

“How can we make it better now without killing the entire project?”

Note the difference between David’s approach and JulieW’s approach to the Broadway Village project.

This is why I’d vote for JulieW to a seat on City Council or the Planning Commission. I don’t agree with many of her views on development, but you know what? I don’t care. She’s asking good, honest questions about projects, and she is not working from some hidden agenda.

She wants what’s best for Ann Arbor, and while her vision is completely different from mine in many respects, the important thing is that she is asking the right questions.

Bravo, Julie.

BTW, I don’t have any answers to your current questions about Broadway Village. I’ll have to do a little research.

Thanks Todd, but I’m just one of many. There are a lot of people out there who aren’t so polarized and who just want to make Ann Arbor work pretty well for the widest variety of people. Unfortunately, these aren’t usually the people who speak up. Mostly the people you see quoted in the paper or at City Council meetings have really strong viewpoints on one side or the other. We need them to galvanize the rest of us, but in general, I think the majority are pretty reasonable and open to discussion given the opportunity.

Here’s the file David provided:

Broadway Village Minutes, April/May 2006

As I read them, I’m not seeing any statement by Tom Crawford like David is quoting – David, were you referring to separate statements made at a Council meeting? Crawford’s statements in the minutes provided are in the style “more information is needed”.

Juliew—
You’re so right. I felt trapped in the middle when this whole Greenway thing started. I wanted to get information, but I felt that the DDA folks were being unnecessarily harsh in labeling anyone who considered a Greenway as a loony leftist, and the Greenway folks tended to be “greenway or the highway.” All I want is something that makes sense and that improves the quality of life. If that means parks on the edge of downtown but not a “full scale greenway”, then great.

It is just amazing to me how polarizing this debate has been since the beginning.

I just saw this.

I. Give. Up.

Have fun, Ann Arbor. I’m not long for this town. With any luck I’ll soon be in a city where citizens understand, and celebrate, what living in a city means. And don’t have so much free time on their hands. I highly doubt that this sort of endless trifling “progressive” “activism” is happening in Chicago, Portland, or even Grand Rapids.

Brandon,

Sorry to be the bearer of bad news but this kind of shenanigans goes on in most “progressive” cities. The difference is that most of the cities that you listed are much larger in size than Ann Arbor so good things eventually do escape the the efforts of the Cahills of the world trying to beat down anything that might disrupt the status quo.

“The difference is that most of the cities that you listed are much larger in size than Ann Arbor so good things eventually do escape the the efforts of the Cahills of the world trying to beat down anything that might disrupt the status quo”

You know, when my brother and I talk about needing more space for our distilling operation (eventually), people are surprised when we tell them that there is zero chance that it will be in Ann Arbor. Speaking with the Greffs about their positive experience in Ypsi certainly had us take note.

This thread explains why opening a business in Ann Arbor can be financial suicide for a small business:

It’s true that rents and taxes are high, and are very difficult and in many cases impossible to overcome. It’s also true that foot traffic is down in much of downtown. And though we just had the best June sales we’ve had in our history (dumb luck) in this very market, we’d never try a second location in this town.

Yes, rent and taxes are probably too high for us, but the real reason is that if we purchase a building or site to be redeveloped, and end up in the crosshairs of a group like Cahill’s (and there’s a ton of ‘em), we’d go bankrupt before we ever opened our doors. And best of all, there is no possible way that you can tell if you are going to be in the crosshairs.

The uncertainty of an actual opening date is too much for any financial spreadsheet to handle…..

Taken from the minutes of the 3/7/06 Council meetings.

The agenda item being discussed is “Public Hearing and Action on Adoption of Northeast Area Plan as an Element of the Ann Arbor City Master Plan—Staff Recommendation: Approval”

It’s quite an interesting read. I didn’t see a single person who did not enthusiastically support the Northeast Area Plan (e.g., people like Chris Crockett, residents in a large condo project), which, among other things, called for more dense development in the area…..

Oh, I’m sorry, I forgot. There was one person who was against the NE Area Plan. Here’s the minutes excerpt that includes that person’s comments:

“L**** S*****, 1327 Broadway, said she was interested in the Northeast Area Plan because there have been several situations where it was used as a defense for a development she did not like (my emphasis added). The first time, she said, was during the Broadway Village project, which she thought was a horrendous plan. She said it was a huge, dense development in the middle of a low-density neighborhood. However, she said, when the project was discussed, the draft Northeast Area Plan was used to defend the project. She said she recently attended a meeting with University planners, who said their plans to develop Wall Street/Maiden Lane were in keeping with the draft Northeast Area Plan. She did not believe that either of the Broadway Village or University plans complied with the intent or vision of the draft plan. Her concern was that somehow this plan could be used by developers as they see fit and she wanted to make sure that it was used correctly so it protected the citizens and the community.”

In case you haven’t already figured it out, the commenter’s address is strangely identical to the business address for “CARD”....and this address is strangely close to the Broadway Village project.

One could almost say that Broadway Village was nearly in “CARD’s backyard”.

......and yes, I was laughing myself silly when I came across the notes from this City Council meeting after I googled “CARD’s” address to see if it was really Dave C.

Hoo-Boy, you just can’t make this stuff up. Where can an interested party get an official “CARD” hat and t-shirt?...... is really the only question I have left.

Free advice to Dave and “CARD”: if you are going to concoct some bs story about your fake concern for the fiscal health of Ann Arbor, and how the “secret city commitee” was somehow just going to approve these bonds without checking the math, and without ensuring that the city bears little or no risk…...at least have the fake numbers ready so that the rest of us don’t immediately realize that you’re full of it.

Or better yet, just be honest about why you don’t want Broadway Village built.

Link to referenced excerpt:
http://www.ci.ann-arbor.mi.us/CommunityServices/
Planning/Planning/minutes/03-7-2006.pdf

God, this city hates its young.

And sorry, Dave, but fuck you for trying to keep my neighborhood shitty. I bet you’d be fighting against a decent bar/evening restaurant over here too. Douche.

Re: development shenanigans in allegedly progressive communities.

The debates never fundamentally change; they just scale up. See the following from the Chicago Journal in which neighbors cite concerns that the building will cast shadows and is out of character with the surrounding neighborhood.

Of course, the dispute centers on a proposed 80-story mixed use tower in the South Loop, where existing zoning would allow about 40 stories.

The debates never fundamentally change; they just scale up.

And this one in Brooklyn.

I guess I’m glad we don’t have Gehry working in Lower Town, at least. Blech.

Test. I’ve entered two comments in the past two days which appeared to be posted, but which weren’t. This is a test.

Yeah, you need to holler back Dave, because those of us keeping score at home have Todd up about 27-2. We’re being generous with the 2.

“Yeah, you need to holler back Dave, because those of us keeping score at home have Todd up about 27-2. We’re being generous with the 2.”

Hey, I’m not the only one who’s asked questions of Dave here. It just so happened that I asked the dumbest question of all.

And don’t forget that I was the one who was dumb enough to halfway believe that Dave C. was sincerely alerting us to poor accounting procedures at City Hall.

And if any of you believe that Dave’s been “trying to post” for the last two days, I’ve got a petition for you to sign that will help block the purchase of the Brooklyn Bridge.

More comedy to follow, I am sure. Get your popcorn and milk duds while you have the time.

ah yes todd, but you are one who ask the direct questions that deserve direct answers. dave, you’re giving sophists a bad name. at least they could fool some of the people some of the time.

Hey, I want to know more about this shadowy “Lunch Bunch.” Someone needs to do a Goodspeed-style expose like he did with Michigamua, posting names as they surface.

Ah! I’m in California now for my son’s wedding and have been using a computer which somehow doesn’t tell Arbor Update properly to remember me. So let me reconstruct my postings.

Murph, the June 2 team meeting minutes contain the reference to what the Assessor’s office is saying. Tom Crawford was not at that meeting. Then, at the June 5 meeting of City Council, Crawford told the assembled multitudes that the taxes were not enough to make the bond payments.

With regard to those payments, todd (and others), I’ve finally remembered more details from 2003. At that time, the staff produced a spreadsheet showing how much in taxes the project would need to generate to pay off the bonds. It showed a tax “capture” for each tax millage involved, for each year. The project was assumed to increase in value each year along with the general increase in taxable values for similar properties, so the total capture increased year by year. There was an interest rate assumption built in to the spreadsheet; sorry I can’t remember what it was.

Anyway, the spreadsheet did not contain an amount for the grand total capture. I laboriously added up the grand total. It was $95 million. This amount would pay off the principal of the bond issue (45 million) and the interest ($55 million).

If we assume that the payments to the bondholders were constant from year to year (as they would be for a house mortgage), instead of steadily increasing, then we can immediately get a figure for annual bond payments: $95 million / 30 years = $3.17 million per year.

I am sure there is a type of municipal bond which has payments increasing from year to year, instead of the steady-payment type. I presume that is the kind of bond that the city is intending to purchase. Sorry I don’t have more info about this.

Now it’s 2006. Council member Bob Johnson told a meeting at the Northside Grill last week that the principal an interest on the bonds would total $80 million. If he is right, then constant annual payments would be $80 million / 30 years = $2.67 million per year.

Can anyone here tell us what interest rate a typical tax-exempt municipal bond is going for now? I think the rate is higher now than it was in 2003, which should mean higher payments now than then.

All these calculations assume, of course, that the project actually brings in enough taxes. The fact that the staff is working hard on a “reality check” for the project is good. But we should not (literally) bet the bank on their results. Remember that both the city and the county did prospective appraisals of the project in late 2003 and early 2004 which showed that the project’s value was far short of what was necessary: it had to be $80 million and the appraisals both came in at $65 million.

Did this failure prevent Council from approving a development agreement in 2004, or from publishing that notice of intent to issue bonds?

No.

Mr. Cahill, you acknowledge that this issue is being carefully studied as reported in the July Observer. But, because you do not trust the City CFO and Attorneys, highly trained people, and because you don’t trust the city council, people who are elected for the most part by huge majorities, by the people of this city, we need CARD to protect us. Keep in mind that if the bonding has to wait until after the Nov. election, the interest rates are likely to be higher and thus it will cost more and the chances are greater it will not be built. Isn’t this all about delaying/stopping a needed development because it is down the street from your house? What makes you think the city would issue unsupported bonds? Why would they not just step away from the project if the numbers don’t work? Why do we need CARD?

Man… I’m hungry, can’t we just go find some barbeque ?

I don’t know Rodney. I’m just the out of focus guy.

It’s too late, Dave. The jigs up.

.....end of thread.

p.s. It’s still funny.

Yeah, funny like a gallows.

The best attempt at getting something built here may just be the first; if this fails another developer will think twice about jumping in. I don’t want to see this area languish in its current state for the next 5 years, or more, and I do not know why CARD does.

It is clear that DCahill has been positioning to help this project fail for some time. Read post 23 carefully, where he is makes sure there are nails for the coffin. No detail too small…

“Yeah, funny like a gallows.”

abc, part of the humor here (at least from my perspective) is that an awful lot of people read Arbor Update….Council Members, Planning comm., politicos…...and this is, ironically because of the groups like CARD, a very small town. This group and these people have lost credibility, and that will make a difference in the end.

The good guys are winning. The freeze-Ann Arbor-in-amber-by-any-means-neccessary crowd is losing. Over last last few years, the curtain has been pulled back, and their positions have been shown to be selfish, untenable, and not in the best interest of Ann Arbor.

Council and others are realizing that groups like CARD should be ignored. This thread shows why.

But I should also say that my extreme viewpoint (remove all restrictions on building heights/size, and focus on sustainable, pedestrian friendly, solid designs) should be disregarded as well.

Why? Because it is so far away from what the bulk of Ann Arborites want, that my views/participation would slow down the process of quickly finding the middle ground, and executing the plan. This is why I’d make a poor Planning Commissioner, and an even poorer Council Member.

The NorthEast area plan cited above is evidence that the good guys are winning. It was endorsed, supported by everyone who spoke (almost), and it is now essentially a contract between citizens and developers.

Hopefully, it will be followed for all projects, and the public/private partnership that’s been so sorely missed in Ann Arbor can finally begin, and new construction can finally support and enrich the goals of the community as a whole. Single citizens, or small noisy groups of citizens, will no longer be able to hold developers and the rest of the city hostage because they won’t be allowed to kill individual projects.

That’s my hope, at least.

Gee, todd, here I’ve given you your long-sought info on the bond payments and all you can say is that it’s too late? Hahahaha!!!!
What an idiot.

I would just like to point out for Dustin and others that if this project were so badly “needed” the market would support building it. Once again, for those who may have missed the essential point: This project costs more to build than it’s worth. This extremely rare circumstance means that such a boondoggle requires a public subsidy. That’s why the bonds are needed, and that’s why the petition drive.

Nearly every private project in a city that requires significant parking, ie. a structure, needs a subsidy. That is why developers build in green fields, acres and acres of parking. The DDA supplies this subsidy in the way of parking downtown but Broadway Village is not in the DDA district. All this proposal really does is set up a new Tax Increment Financing zone, another DDA if you like. Without the city and state particpation and the brownfield money, this will be another strip mall or perhaps as you prefer, it will remain the way it is, blighted and abandoned with the pollution closing in on Traver Creek and the River. Just as it has been for the last 10 years.

Call me all the names you want if it makes you feel better, Dave….you’ve already showed everyone here the hand that you and CARD are playing (pun intended), and all the numbers that you can cobble together at this late date won’t change that fact. You and I both know that you don’t mean it when you call me an idiot. Your bluff was called, so just let it drop.

Oh, and Dave: congratulations on your son’s wedding. I’ve said this before: while we are obviously on different sides of the fence, and I disapprove of your political methods since I am not a political animal, one of these days we’ll have a beer or two. I’m sure we’d get along just fine….as long as neither of us mentions Ann Arbor. Which is fine by me.

p.s. I sincerly hope that you and CARD drops this charade when you find out that the City has no intention of issuing bonds without insuring the City’s financial security.

While not endorsing Cahill or CARD at all, one must still note re

“Single citizens, or small noisy groups of citizens, will no longer be able to hold developers and the rest of the city hostage because they won’t be allowed to kill individual projects.

That’s my hope, at least.”

You lose once again, todd. The date is not “late”. The petition drive runs for another month. What bluff? I provided you with everything you asked, despite your claims of my dishonesty.

There is a history on this project of the City (i.e., the City Council) going ahead with various approvals even though the staff has repeatedly said (and is still saying) that the project will not be worth enough to pay off the bonds.

Hence the petition drive.

I know that a lot of people on Arbor Update are passionately in favor of development. However, the Ann Arborites who do not have a financial or professional interest in new construction (and they are in the vast majority) are the ones who will decide what happens to Broadway Village.

The beauty of a petition drive is that those who don’t favor it can’t stop it. All they can do is sweat out the petitioning period. 8-)

“There is a history on this project of the City (i.e., the City Council) going ahead with various approvals even though the staff has repeatedly said (and is still saying) that the project will not be worth enough to pay off the bonds.”

I see evidence from, for example, those meeting minutes, that staff is being (appropriately) skeptical about claims of the projects worth. Have they really come to any final conclusions, though?

I thought those “approvals” already explicitly included clauses that make final decisions depend on answers to the questions you’re worried about?

Dave Cahill wrote: “The beauty of a petition drive is that those who don’t favor it can’t stop it. All they can do is sweat out the petitioning period.”

Sweating, maybe. But could be this is the kind of sports drink those who oppose the petition drive are sipping: they flat out think that if it shows up on the ballot, that they can win the day at the polls; and if they win at the polls and the project is a success and the bonds get paid off with room to spare, a win for the City and the city; but if they win at the polls and the project is a flop and general fund money has to bail out the bond payments, well, who approved it, the People, that’s who.

My sense from reading through the minutes of the meetings of the City staff is that the City has in some cases just taken the developer by the scruff of the neck and said, Hey, that’s not good enough, or that’s not realistic, do it over, do it again. So at this point I’m reasonably confident that the City isn’t going to expose us to unreasonable risk, and that they will walk away if the numbers represent an unreasonable risk. In any case, I would prefer that City staff and my elected officials take responsibility for it, because they have an accountability that the electorate does not.

Dave Cahill, any possibility you’d post a running total of signatures gathered?

Sigh.

OK, I tried to wave the white flag, but to no avail. No complaining from the peanut gallery….I tried to stop this.

Here’s my assertion, Dave, in plain, simple English: The City has no intention of issuing these bonds unless the bonds payments are covered by the taxes.

Here’s an excerpt from Tooter Talk with Homeless Dave, where he is discussing, among other things, the situation with Broadway Village with 1st Ward Councilman, John Roberts.

JR: Well, I think, unfortunately for me, I have not had an opportunity to really look in complete detail at how that’s being set up from a financial perspective, to be able to give you great detail on it. But at a very high level, there are certain things that the developer was looking to do. And they needed some financing in order to make that happen. By us providing bonds, it would allow them to get the project going and get it done. But then they are paying back those bonds over the years through the taxes that will be built off the parking structure there. And the city will own the parking structure. The question becomes whether the revenues that are being generated are enough to pay back the bonds. And …

HD: ... so is that the only source of revenue that the bonds can be paid back out of, or can the City say to the developer, Look, the …

JR: ... well, it’s also based off the taxes. The taxes from the property will help pay back those bonds also.

HD: So taxes, and then the parking structure revenues, and are there other sources? I mean can the City of Ann Arbor say to the developer, Look, it turns out that the property taxes and the parking revenues, they are falling short of what the bond payments are, and we don’t really want to dip into the General Fund, or whatever fund has to be dipped into, so we need you to throw in some more?

JR: This is something that’s new for the City. And that’s why the financial group, Tom Crawford [CFO] and his group, are being very diligent to make sure that the City is not exposed in any way on this deal. Before we move forward and say that this is a Go on this deal, we’re going to make sure that all the loopholes are closed and that the money is going to be there to pay back these bonds.

HD: So the City hasn’t made a decision to issue the bonds yet?

JR: Correct.

HD: It’s still possible to say, You know what, we’re just going to walk away right now?

JR: Correct. Right. And I think that that’s the whole misnomer of this whole thing with the bonds is that we as Council approved the intent to issue those bonds. We needed to do that because of the lag time that it takes from issuing that intent. There’s a 45-day window there. But in no way shape or form are we obligated to issue those bonds. Up to this point and currently, Tom Crawford and his group, and there are City sub-committees that are working with the developer, to make sure that they’re meeting certain performance standards. As they hit those performance standards, it’s minimizing the risk that the City’s at. So that’s where things are there. And as far as Lower Town goes, I will say this, that Lower Town was a project that from a site plan perspective was approved before I was ever on Council. I’m not going to sit here and say that I agree with the project or disagree with the project, because that’s a moot point. That would be arguing that horse has already left the barn there. There were certain stipulations and contingencies the developer has to meet and it’s my job at City Council, and for staff, to make sure that they are meeting those and that the City’s not exposed.

There you have it, spelled out by a Councilman.

Dave, this doesn’t mean that I don’t like you!

Now go outside and enjoy your new addition to the Cahill family, you crazy little “El Guapo”!

Referenced website: http://www.homelessdave.com/
tt20060629johnroberts.htm

Okay Dave, you’re confusing me. I’ll go so far as to give you an attempt to educate me, though I doubt you will, as I and many others think you’re hiding behind numbers.

So from 2003/2004 to 2006 the principal and interest on the bonds has changed by $15 million. from 95 million to 80 (though i don’t know how 55+45 adds up to 95) so we have a 16% change there. i’m getting these figures from post 73. I’m not sure why it has changed, but whatever. i was a politics major and we were never interested in the facts anyway.

Now, we’re working with an assessment done 2 1/2 years ago or so. i don’t know much in this crazy, mixed up world, and i know even less about assessments, but what if a new tax assessment went 16% higher (75.40 million for those of you at home)? would it change depending on what was built? did they assess with or without a hotel? would the assessment change if they knew that all of us that live within a quarter/half a mile (CARD members excepted) would jump at the chance to have some retail/dining/shopping in that area? would more or less parking affect the assessment? would medical vs commercial change the assessment?

again, i don’t know much about city financing, but neither do most people who are going to sign your peition, dave cahill, so if you make things clearer for us we might be more inclinced to follow your position…or clarity could leave us rolling on the floor in laughter. either way, i’d be interested in having a more educated party address what i perceive (rightly or wrongly) to be some inconsistencies.

Todd, it’s really great to have John Roberts come forward and say the things he said in the materials you quoted. Remember, though, that Roberts represents the First Ward, where the project would be, and that his predecessor, Kim Groome, forcefully opposed the project. So does Council member Bob Johnson. I would feel better about Council’s caution if Mayor Hieftje, Jean Carlberg, or Leigh Greden were saying the same things. So, far, though, silence from them.

In fact, Council and other decisionmakers appear to have vanished from Arbor Update. A while ago, we would see comments from one or the other people with actual authority. Recently, though, nothing. So maybe there is not a vast number of lurkers out there.

Now, tim, let my try to answer your questions. I’m operating without my files, unfortunately. $40 million principal plus $55 million in interest equals $95 million to be paid to the bondholders. I think Bob Johnson misspoke at the meeting when he said the amount to be paid was $80 million, since interest rates are higher now than in 2003.

Yes, whatever the various uses are within the project would change the assessment somewhat, since the assessment depends on the rents that the owner is receiving. Some uses generate higher rents than others.

If you check out the team minutes of June 2, you will see the assessor’s staff saying that the new assessment will be lower because of a revised treatment of parking structure revenues. I haven’t seen any of the materials distributed at any of the team meetings. Presumably they would give us more information.

You never know who may be on City Council, though, Dave: see today’s AA News, Local Green Party pushes divestment from Israel: Henry Herskovitz considers City Council run on the issue ,

Henry Herskovitz, a member of Jewish Witnesses For Peace And Friends, said he is considering running for the City Council in the 5th Ward and his platform will be divestment from Israel. His group has been protesting outside Beth Israel Congregation synagogue before Saturday services every week for the past several years.

“If I have to run for City Council office to get that message out, I will do that,’’ Herskovitz said. ...”

I’ve heard some offline comments about the bond “subsidy” that merit correction. So, here’s my attempt at an explanation of why this “subsidy” is okay.

There are two definitions for “brownfield”; one is “contaminated with nasty crud that needs to be cleaned up”, the other is “developed in a functionally obsolete fashion”. The one leads to sickness and death of people and/or other critters; the other just leads to a built space laying fallow and unused. Both of those things are bad, and both apply to the Broadway Village site.

Providing public funding for the redevelopment of brownfield sites is pretty standard practice, in recognition of the public good involved in cleaning up either kind of brownfield. Brownfield redevelopment includes substantial benefits for the public that are not captured by the developer/user – redevelopment has positive externalities.

I’ve heard it said, “if this development needs a subsidy to succeed, maybe it isn’t economically the right development.” On the contrary, when a positive externality exists, economically, a subsidy is the right thing, as a mechanism for paying for the public benefit. If no subsidy is provided in payment for the public benefit, then an economically inefficient outcome will result, such as the site continuing to lay un- or underused, a sore on the face of Ann Arbor.

The now-standard mechanism for providing this repayment to the developer, in exchange for the public good provided by redeveloping a brownfield site, is a brownfield TIF, or tax-increment financing. Public money is provided upfront and paid back through the new property taxes (the incremental taxes) generated in the first several years of the development. It’s a very clever mechanism for buying something of value with public money without actually subtracting any public money from anything.

So the bonds in question for this project are not something unusual or special, and do not by their existence imply that the project is economically unwise. The bonds are just part of a standard practice of cleaning up some mess in the existing built form, using a private developer as the agent of the clean-up.

“Bonds = subsidy = wrong” is not a valid criticism of this project – in fact, “bonds = subsidy = right”, economically speaking, because of the positive externalities involved.

This doesn’t necessarily mean that the bonds should be issued blankly or without any scrutiny or oversight, of course – we, the Public, need to make sure that we’re getting what we’re paying for. And, from the documents that David has provided (thank you, David) and the interview with John Roberts on the ‘totter (thank you, HD), I’m at this point pretty confident that the bonds are well under the microscope.

So what’s the purpose of the petition? A group of citizens that doesn’t understand the economics involved, as their press release indicates, thinks that they should provide oversight instead of the people we’ve elected and hired to rigorously crunch the numbers. I’m only in favor of direct democracy when the demos involved is willing to put in the time to understand the issues. And, so far, it appears that most are either acting from faulty assumptions or no assumptions.

Which is why I generally dislike petition drives. (See also: Keep Ypsi Rollin’s charter amendment petition drive.)

In Post 88 Mr. Cahill makes it clear he feels the duly elected leaders of the city will knowingly approve a bad financial deal. Despite the fact that both Mr. Roberts and the July issue of the Observer are clear that the city is looking at this very carefully. Please David answer two questions:
Why would they do this? (Some secret payoff, an even deeper conspiracy or they are just plain stupid?) Why would we believe this is not all about the project being down the street from your house?

I understand Murph’s theory. But I disagree with it with regard to this particular project. This thing is the largest brownfield project ever proposed in Washtenaw County, the first in AA, and one of the largest in the state. The developer, with the encouragement of Council, has managed to parlay a small amount of brownfield cleanup funds ($4 million) into an immense $185 million project.

Public subsidies distort the market. The site in question has repetedly failed economically. I expect the reason is the odd traffic pattern in the area. A mistake here, involving public funds, will be a really big mistake.

Just the city subsidy alone ($40 million) is ten times the clean-up cost.

Council has repeatedly given the developer approvals that sound preliminary. But remember that, relying on those supposedly preliminary approvals, the developer has already spent over $1 million on construction of a new mini-mall across from Kroger’s and relocation of tenants. Council has built momentum for the project. Council has raised legitimate expectations in the developer’s mind that the project will receive final approval. Such expectations can be used to convince Council that it really ought to give final approval, even if those meddlesome staff people disagree.

Ask yourself this question: If Council really intends to take the staff’s advice on the project’s soundness, why did Council pass a resolution stating that it intended to issue the bonds before the staff had a chance to make its formal recommendations, and despite the comment of Tom Crawford at its June 5 meeting that the taxes were insufficient?

Council’s track record on this project is not good.

While John Roberts means what he says (and thanks to him if he is reading this), he is not calling the tune on this project.

Bob Johnson, the senior First Ward Council member, said last week that this project is an inappropriate use of the Tax Increment Financing (TIF) mechanism.

Nonetheless, Roberts and Johnson can’t stop this project any more than Groome and Johnson could derail it in 2003.

Why not ask Mayor Hieftje, and/or Council members Carlberg, Greden and Easthope why they voted to publish that notice of intent before the staff investigation was complete?

TIF is a mechanism, not a subsidy.

Public subsidies distort the market.

This statement is exactly what I’m calling wrong on the theory, which has to be cleared up before talking about the magnitude.

Public subsidies can create market distortions, but can also correct market distortions. Externalities, whether positive or negative, are market distortions. I would disagree with Dale and say, sure, TIF is a form of subsidy.

David, as long as you’re throwing around the blanket statement that a subsidy is a bad thing, I’m going to disagree with you. When you can stop taking a knee-jerk Libertarian’s attitude towards public financing mechanisms, then we can settle down to a more nuanced discussion of this particular project.

As I said, I don’t know enough numbers to say whether this is the right level of financing for this particular project. I don’t expect that I’m the right person to make the final decision, either – that’s why we pay Council the big bucks (ha.) and hire city staff. It’s open for discussion whether this is a good project for the site – and, like todd, I think that’s the discussion you’re really trying to have.

Like David, I’d be happy to see people like John Roberts, Bob Johnson, and Tom Crawford chip in their two cents – better to hear some of the facts from the people who know them all rather than secondhand through David or Tom Gantert.

Mr. Cahill, the July Observer, a publication you have held up in the past, speaks to this issue. The City and the City Council are taking great care in exploring all facets of the financing for Lowertown. Please tell us why you think council would approve a financing agreement and bond sale if the numbers do not work out. Why would they ignore the advice of their CEO and Attorney? What would compel them to do this?

“It’s open for discussion whether this is a good project for the site – and, like todd, I think that’s the discussion you’re really trying to have.”

Yep, that’s my position in summary.

In fact, if Dave would take two seconds and actually read my posts, he’ll notice that I didn’t say that I was supportive of this project.

I really don’t know much about Broadway Village…..which is why I thought that JulieW’s question of “is this a good project for this space?” was a good one.

So to answer Dustin’s question for Dave, since he’s neatly ignored it, Dave doesn’t honestly think that the city is going to willfully issue bonds that don’t pay for themselves, even though he probably won’t admit that.

I think that I can speak for many here at Arbor Update, Dave, and say that you and CARD would be better off, and a lot more honest if you’d just say “Look, we think this project sucks. Since City Council already approved this project, pending the issuance of bonds, our only chance to block this project is for you to sign this petition so that we can vote ‘no’ on the issuance of the bonds.”

See how much better that is Dave? No subterfuge. No made up or incomplete bond numbers. No implications that Council is either corrupt or incompetent.

And you know what, Dave? If you make your case as to why Broadway Village as proposed sucks, some of us here (including me) might actually sign your damn petition.

......That’s why this tread was so funny, Dave.

I think this project sucks because of the huge public subsidy. Oh, I suppose it’s too big for my personal taste, but the subsidy thing is what has always done it for me. I live far enough up the Broadway hill that it won’t affect me. Broadway has traffic humps, and the street is already parked up in the daytime anyway because of overflow from the Kellogg Eye Center.

It would have been acceptable to me if the DDA had taken over this project. In fact, I remember several years ago suggesting that the DDA be extended to reach this site. A downtown development authority has to be one contiguous area without “islands”, but that could have been achieved legally by extending the DDA to include just the actual streets of Division and Broadway (not the houses), connecting the main DDA to the Broadway Village part of the DDA.

But the DDA wanted nothing to do with the Broadway Village project. (Murph, mention this to Susan Pollay sometime.)

And I personally expect that if the petition drive does not succeed in blocking the bonds, Council will go ahead, override its staff, approve the project. If they were not planning on approving the project, they wouldn’t have published that “notice of intent.” They had no reason to publish that notice until the staff work had been done, after all.

So a vote of the public is the only chance we have to block the big subsidy.

I didn’t realize how long you had been a DDA advocate, Dave.

Mr. Cahill: After two years the City Council has not taken any final action on the financing of this proposal. Why would they not publish the notice of intent to start the time clock while the research is ongoing? They still hold all the cards. The publication changes nothing. Despite considerable evidence they are approaching this very carefully, doing all the proper research and background checks, you persist in saying they will take risky, irresponsible action and we need CARD to protect the city from financial disaster. If you step back and consider that except for Ann Arbor and a few others, cities in this state are generally in sorry financial shape, it appears the current council has shown a firm grasp of financial matters. Please tell us WHY council would would take such risky action and approve the sale of unsupported bonds.

ummmmm, ..... aside from the considerations above, in both directions, there is at least one different question that puzzles me.

a few years back i ran into a legal prohibition against taxpayer dollars being used for any development that is inside the boundries of a flood plain.

there are some specific quantifications and attached statistics to that prohibition that i don’t have a handle on – which taxpayers and how often the place floods were two of the statistical quanta that i do remember.

new orleans aside, this prohibition is intertwined in both michigan and federal statutes, somehow.

my question, then, is: “is this project a legal use of taxpayer dollars given its location?”

cheerrioz, toasty

Mr. Cahill, your argument against Murph’s explanation (it is not a theory, but it could be called an opinion) begs a number of questions.

You say, “This thing is the largest brownfield project ever proposed in Washtenaw County, the first in AA, and one of the largest in the state.” And your point is…? Its size is only relevant if you are comparing it to other brownfield sites and their relative costs (but brownfield costs are difficult or impossible to compare due to factors described in the 2nd paragraph of post #90). Are you trying to say that this project’s costs are out of line for its size? No one has made reference to this. Why does the size matter; the site is what it is?

You also say, “The developer, with the encouragement of Council, has managed to parlay a small amount of brownfield cleanup funds ($4 million) into an immense $185 million project.” I keep reading this and cannot understand what seems to be your distain for this outcome. Should the developer have asked for more cleanup money, would that have been a better result for you? If the developer only needed $4 million to prepare for a $185 million project isn’t that good?

You further write, “Just the city subsidy alone ($40 million) is ten times the clean-up cost.” Are these two things related? Is the $40 million that the developer is looking for based on a calculation to remediate problems that exist on this site? If this is the distortions that Murph is referencing how were they figured? Are you arguing that the calculations are wrong? I for one don’t know if it is too high, or possibly too low.

Still more, you say, “I think this project sucks because of the huge public subsidy.” You may not want to support the $40m bond and that is your choice; you might not want to support any bond for this project. But we should be clear because you haven’t even begun to justify the use of the term ‘huge’. For all I know, this bond may be miniscule compared to other projects with similar issues. Nevertheless you have shed no light.

Lastly you declare, “Oh, I suppose it’s too big for my personal taste…” So what are you doing to make this project the best it can be? Clearly you, and your group, are actively working to tear apart the current process but doing so without a concept to replace it is irresponsible and doesn’t fit into CARD’s agenda.

The clean-up costs are being used as a rationalization for the project instead of as a reason for it. This large project is not being built in order to clean up the pollution. Instead, the pollution is being used to attract the subsidies that will result in a project on steroids.

As far as I know, the $40 million bond issue is the largest in the state. I call it huge because it is almost half of our annual City budget. It is the largest project the City has ever been actively involved in. For comparison, Jim Koli, who runs the Northside Grill, says that the cost of the Broadway Bridges project (the largest project until then) was only $21 million.

Please rise above the concept that any group or members of the public has any influence on what the developer has decided to build. Although there is a big public subsidy, there is no public control over what the project looks like or who the tenants are.

The developer wants to feed at the public trough, but the public has been shut out of the design process.

If Broadway Village fails (because the public turns down the bond issue or otherwise) the developer will be perfectly free to build a wide variety of other kinds of projects. The developer had to submit a “Plan B” to show what could be built without all the special favors the developer wanted from the City. It showed a standard commercial structure. The developer said it might be a Walgreen’s drug store.

Greatly appreciate the candor in post #97, Dave.

It makes for a much better read.

Enjoy the holiday weekend, everybody…

Oh, and Happy Birthday, America!

In post #97, Cahill asserts that the DDA wanted nothing to do with the Broadway Village project. When he talks about extending the DDA, it is not so simple as that. If the DDA boundaries had been changed, the whole plan would have had to go back to the governing entities which had originally acquiesed to their taxes being captured. It was not worth the effort. The Broadway Village project is not within the DDA boundaries, and when we were looking at changes, that area was never even considered- we were looking at the other end of town – at S. Forest. These are the facts. I was there.

Mr. Cahill: Please read post #99. Given all the information that shows council is looking at this issue very carefully and given the fact that this council seems to have a good handle on financial matters, please answer three questions: Why would council override the advice of their CEO and Attorney? Why do you believe they will approve the sale of unsupported bonds and put the city in a risky financial position? What would induce them to do this?

Thank you.

“They had no reason to publish that notice until the staff work had been done, after all.

So a vote of the public is the only chance we have to block the big subsidy.”

Dave, John Roberts offered a very plausible explanation for the timing of the notice. As for opportunities to stop the bond issue (your term “block” is an indication of your apparent preference for zero-sum games), they would also include communicating directly with council.

Your concluding sentence in #37 likewise overlooks that option. Both the Business Review article and toasty’s post indicate that there may be environmental regulations that could affect the outcome as well. Your narrowmindedness, willful ignorance, preference for conflict, or whatever it is that leads you to communicate this way puts your judgment into question. Citizen watchdogs of government perform best when they focus more on the implications of government action than on the motivations for the action (in large part because alleged motivations can be easily denied.) If you want us to follow your lead, give us more reasons to trust your judgment and fewer reasons to question your tactics.

I also think that abc has a point, that you haven’t offered an alternative vision or process to replace the unacceptable ones you oppose. This in spite of several people here pointing out the current deplorable condition of the site. In your last post you complained about various aspects of the project but didn’t clearly state what you believe the role of citizens should be and under what circumstances. Do you or anyone in CARD have suggestions for how this type/size of TIF request would be best evaluated? What’s the best possible outcome for the site, in your opinion? Or is your only goal to “block” the project? Any plans by CARD members to offer public comment to council?

Your concern about the amount of the TIF compared to the cleanup costs may be a valid one. (The amount of the total project would be a separate issue I would think. You might want to be more clear about that as well.) When the Environmental Commission made its recommendations to the city regarding the brownfield authority, that question came up. I don’t think it was ever adequately examined, though. What are your thoughts on limiting public investment relative to public benefit in this type of situation? (Please keep in mind your own distinction between rationalization and reasoning.)

I was there too, Leah. I remember a phone conversation in which you vehemently objected to the proposed Broadway Village parking structure. You thought it could never be properly maintained. You went on at some length about its problems.

Why do I think Council would override the advice of its CFO? Because even though its CFO said three years ago that the City would only bond to an amount supported by the staff’s $65,000,000 appraisal, Council has persisted in going ahead with the project by (1) approving a partial development agreement in 2004 and (2) publishing a notice of intent when the staff work should have been finished first.

Also, because as the secret team minutes show, City Admistrator Roger Fraser was pushing for the next step in the process – an “inducement resolution” – for sometime in May.

Roger has always wanted this project. So have the governing forces on Council – Hieftje, Carlberg, Greden, and Easthope. Council has never listened to those raising financial or other objections. Since the past is the best predictor of the future, I expect they won’t listen in the future, either. 8-)

Happy Fourth of July, everyone! Look for our petition circulators wherever there are large numbers of people.

Dave Cahill wrote: “Look for our petition circulators wherever there are large numbers of people.”

You mean like, I dunno, a parade?

And as far as the ‘inducement resolution’ goes, I had no idea what that meant, but guessed it meant a resolution to publish the intent to issue the bonds. However, Dave Cahill’s last comment makes me think that guess is probably wrong.

Perhaps someone could comment on what exactly an ‘inducement resolution’ is?

Parade start is 10:00am, by the way. Perhaps next year, AU could come up with an entry?

Thank you for the answers Mr. Cahill. Three more questions if you please:
Isn’t it true that until the financing agreement is approved and bonds are sold, Council holds all the cards and they could pull the plug at any time?
Do you really think they would, with negative reports from the CFO and Attorney in hand, approve the sale of unsupported bonds?

What would their motivation be to cause them to want this project so badly that as you imply, they would seriously endanger the financial status of the city?

Of Dustin’s recent batch of questions to David Cahill, it seems that the most productive one is what the motive for council would be to push the project through if it will be a financial burden. It’s pretty clear that council can still pull the plug. Cahill hasn’t contested that. And his concern that council would go against the advice of staff and the CFO is what started this thread. While I agree with abc that watchdogs groups are better off focusing on the impact of decisions, the lack of motive here is an obvious hole in the argument.

The maintenance of a parking structure has NOTHING to do with the DDA boundaries. I am very sensitive indeed to the maintenance of such buildings because I was on the DDA when we took over the parking system management and went through the process of repairing and replacing parking structures. My anxiety about the parking structure maintenance had nothing to do with the concept as a whole, and if you recall, I voted “yes” at the Board of Commissioners meeting when the request for a Brownfield Authority grant was on the agenda.

Once again, get your facts straight. The issue of the parking structure maintenance is totally irrelevant to the change in DDA boundaries. It appears that you will grasp at anything to try and discredit people in order to further your own point of view. Stick to the issue being discussed.

As to the motives of various Council members, I think you should ask them. I’m not saying that Council members (and others) who want this project are evil. I’m only saying that this thing should stand on its own merits and not require a public subsidy.

With regard to the DDA, Susan Pollay (the executive director of the DDA) was at many of the meetings of the Brownfield Review Committee in 2003. The Committee was dealing with Broadway Village exclusively. Susan is one of the smartest folks on the City staff. She wasn’t shadowing Broadway Village for her health.

I know the extension of DDA boundaries was considered. I think John Hieftje also came up with the idea of extending the boundaries to include Broadway Village. I remember being told the idea wouldn’t fly because the neighborhoods in between the present DDA boundaries and Broadway Village didn’t want it.

David – you are just plain wrong an all counts. If John wanted to extend the DDA to those areas you mention, he never brought it up at any DDA meeting.

And as for Susan attending meetings, she attends many, many meetings. She, and I, are always interested in what goes on in the community. I am in places that you would never imagine, because I am curious and attentive.

So, don’t draw false conclusions.

There has been an incident.

Peter Allen was the person who thought up Broadway Village. He and his company have a 15% interest in the project according to recently filed documents.

Last Saturday at the Farmers Market he came up to one our circulators. She was wearing a cloth sandwich board saying that the city was going to give the developer money. I was not there, so this is her report: Allen was rude and obnoxious. He was livid. He said she was lying and deceitful because the money was not a gift, but a loan. He said he insisted that she change the word “gift” to “loan”. So in order to get rid of him, she did.

He said City Council had already voted on this project.

This encounter reduced our circulator to tears.

She does not want to make a big deal of this incident – unless something like it happens again – because she thinks it would distract from the petition drive.

I can’t wait to hear what the Lunch Bunch has to say about this!

What’s a “cloth sandwich board”?

maybe the super-secret city team can put on their alter-ego costumes and put a stop to these treacherous “incidents.”

“She does not want to make a big deal of this incident – unless something like it happens again – because she thinks it would distract from the petition drive.”

Got that everybody? Keep it under your hat. Until next time.

Please let something distract from this petition drive!

“She does not want to make a big deal of this incident”.

....so you post one side of this story on Arbor Update?

You are one smooth operator.

Here is my attempt at estimating bond payments and revenues from TIF and parking. I’m not claiming that the numbers and methods are correct and would encourage others to contribute corrections. In fact I’m sure they are not that close. However, I feel that in absence of a qualified response to CARD’s unsupported assertion that the TIF would not pay off the bonds, we should have some numbers to consider.

Bond payment
Based on a $40 million bond over 30 years and 4.61% rate, a loan calculator says (roughly):
Monthly payments: $205,300
Yearly payments: $2,463,600
Total interest: $33,900,000
Total amount paid: $73,906,900

TIF revenues
Based on the following:
Current tax collected from property (2005): $150,000
Estimated future value: $65,000,000
Taxable value adjustment: .5
Property tax rate (millage): .059
Time Period: 30 years
I estimate the TIF revenues to be
(37,000,000 * .5) * .059 = 1,917,500 per year,
subtract out the $150,000 in existing taxes per year,
resulting in total revenues of $53,025,000.

Of course that assumes that the value of the land is $65 million immediately. Usually TIF assumes a ramping up period. A 10 year ramp-up results in a total reduction of about $8 million and a 20 year ramp-up results in a $19 reduction in total revenues.
Based these numbers, WHICH ARE NOT VERIFIED OR NECESSARILY CORRECT, it looks like revenues are short by at least $500,000 per year.

Don’t forget that this project will use parking revenue to pay off the TIF. Anticipated revenues and the point in the budget where revenues are determined are not known, so it is tough to say how much this will contribute, but it will at least make a dent.

Obviously many of these numbers can be shifted for different results, and many probably should be. I’m especially uncertain of how to determine the assessed and taxable value of the property. .5 just seemed close. The current tax revenues are al