Arbor Update

Ann Arbor Area Community News

Downtown Drama

1. June 2006 • Dale Winling
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Flickr photo by John Baird; some rights reserved.Ann Arbor’s downtown gets still more attention from planners, developers, and reporters as the News offers two stories on downtown development and density.

The First and Washington site, once the location of the nation’s first municipal parking garage, then the location of an awesome demolition, now the location of a boring surface lot, is the subject of three proposals pursuant to the remnants of the Three Two One Site Plan.

The proposals boil down to 1) a 100-room hotel, 50-condo development with a parking deck; 2) a 72-condo development, with 48 slated for workforce housing; 3) a 114-apartment “luxury hotel experience.”

Today’s News addresses growing momentum for a Transfer of Development Rights program (TDR) in Ann Arbor and Washtenaw County.

Recommended by Calthorpe and Associates and the Washtenaw County Comprehensive Plan, TDRs offer a middle ground for enthusiasts of landscape and historic preservation and pro-density urbanists.

  1. If anyone has images they can link to for the proposals, please do. Two looked like decent, contemporary urban architecture as seen in most American cities these days. One looked like crap.

       —Dale    Jun. 1 '06 - 04:20AM    #
  2. There are some pictures of the structure (i’m pretty sure its the one in the article) on Jim Reese’s website (get to it by clicking on the photo for the jefferson market pic)

       —Just a Voice    Jun. 1 '06 - 04:46AM    #
  3. I’m skeptical about the Mayor’s suggestion that TDR could function by paying into the green belt fund instead of securing actual development rights. This seems to be the same mechanism that allows developers to pay into a low-income housing fund that is not producing housing.

    Is it more difficult to get developers to ante up cash for TDR or to actually secure a property within the send zone to offer in trade? I’m looking into what the impact of TDRs are on the value of property in send zones right now. It seems that if the send zone overlaps with green belt properties, the city may be driving up prices of development rights by encouraging developers bid against them.

    I guess I see potential problems either way. that’s not to say I think it is a bad idea.

       —Scott TenBrink    Jun. 1 '06 - 11:29AM    #
  4. Scott, I have vague memories of various speakers at the Downtown Development Strategies (Calthorpe) hearings talking about this issue – Mike Garfield (who’s on the greenbelt commission, I believe?) said something about TDR in a standard, project-wise send/receive fashion not specifically being authorized by State law, but that Ann Arbor, through the greenbelt fund, had a valid mechanism for approximating this. It was also mentioned, I think, that having the TDR happen through the Greenbelt mechanism would allow the benefit to be coordinated with other greenbelt purchases for maximum conservationy goodness, rather than having it happen hodge-podge by developers offering up rights on whatever parcels they can find.

    So far, I haven’t seen any sort of consensus on what the affordable housing fund should be used for. Units downtown? More units not downtown? What kind of units? How affordable? I think we need to work on a strategy for spending that money – spending it badly, after all, will get the City attacked every bit as much as not spending it at all. Meanwhile, the greenbelt fund is being spent – they’ve made at least 3 or 4 big purchases so far that I can remember?

       —TPM    Jun. 1 '06 - 05:53PM    #
  5. TPM is correct … the state does not have enabling legislation that would allow sending/receiving zones. The only thing we have in MI that is close to a TDR concept is a provision in the state PUD zoning regulations that allows for non-contiguous open space to be counted towards “public benefit”. We don’t currently have that option in our Ann Arbor PUD ordinance, however. As a member of both Commissions, I can share that the discussions by the Greenbelt and Planning Commission to date on this topic really stressed the need to maintain the quality of the Greenbelt. We have a rigorous scoring and screening system for properties … as TPM wrote above, we really don’t want a system that allows the developers to pick any piece of property out there. At the same time, we need to preserve the zoning and planning standards in the city. How we are able to do this is the tricky part. There are good people at the city and on the Commissions thinking about this now … any ideas from Arbor Update readers would be very helpful.

       —Jennifer Hall    Jun. 1 '06 - 08:34PM    #
  6. TDR is usually designed as some kind of compensation to the owner of a property which is restricted because of historic designation or otherwise. In NYC, for example, the transfer of rights occurs only within a relatively limited territory, such as a block.

    For the greenway/downtown situation, if you want 20 stories downtown and farms in the greenbelt, you’d zone downtown for 20 stories and zone the greenbelt agricultural. The trouble is that developers would sue claiming that the very-low-density agricultural zoning is an illegal taking of their property rights.

    So, if you want to link the two, you could have a low height limit downtown, waivable by donating the development rights on parcels in the greenbelt. The trouble here is that the value of the right to build further up does not necessarily equal very much land on the edge.

    I mean, say the default height limit downtown were four stories (hi, Dave!), and the absolute highest waivable limit were 30 stories. And let’s say a developer goes for the max. That would be a big project with a big impact on downtown, both positive (housing, activity, tax base, etc) and negative (traffic, parking, infrastructure load).

    But it’s hard to imagine that the extra 26 stories would be worth more than the development rights on, oh, say 20 acres in the greenbelt, which otherwise would be something like 80 McMansions on quarter acre lots. Or double that and say 40 acres.

    Well, 40 acres is well and good, but there are 640 acres in a square mile, and there are dozens of square miles surrounding Ann Arbor which are at acute risk for turning into sprawl.

    I’m as pro-downtown-density as anyone, but I can’t get very excited about having at least 16 buildings bigger than Tower Plaza for every square mile saved from sprawl.

    This really points up the need to have multiple areas for high density development, e.g., Stadium & Liberty, Plymouth & Nixon, etc., ideally with fast transit connecting them all.

       —Larry Kestenbaum    Jun. 1 '06 - 10:31PM    #
  7. Larry, I’d hope that any TDR discussions being held have a little more math (or at least mathiness?) to them than your comment. With all due respect, statements like,

    But it’s hard to imagine that the extra 26 stories would be worth more than the development rights on, oh, say 20 acres in the greenbelt,

    sound kind of FUDy.

    Not that I necessarily have numbers myself. Let’s see: the most recent Greenbelt purchases seem to have cost about $17,600 per acre of development rights, in Salem and Superior Townships. To make up a number for downtown, let’s say the land cost of a dwelling unit is a tenth of the end cost. Say, $25,000 – $35,000 / unit. At that rate, every extra unit downtown would be 1-2 acres of PDR in the greenbelt. Recent plans include a range from 4 units/floor (Loft 322?) to 10ish units/floor (Glen-Ann and Ashley Terrace?). So that’s anywhere from 4 to 20 acres of PDR per floor added, depending on the price point and floor layout of the project. So, Larry, one of your 30 story buildings would, at that rate, preserve 104-520 acres in the greenbelt.

    Obviously, I’m making this up as I go along, Calthorpe Place style, and I’d be happy to hear more realistic numbers.

       —TPM    Jun. 1 '06 - 11:18PM    #
  8. I’m not trying to spread FUD, rather, I’m trying to rein in irrational exuberance about the prospect of TDRs, especially, trying to translate acres of greenbelt into stories of high-rises.

    I suppose we would have to grope for some kind of exchange rate between the two concepts, and be ready to face the possibility that setting the price high enough to make a difference makes it too expensive to be actually used.

    Remember that the value of the rights to build more stories has to be effectively discounted by the extra cost of building those additional stories, compared to the cheapness of building a single story on the ground.

    TDRs also presuppose a regime of rigid and uniform rules about new buildings which can only be “bent” through transferring rights from elsewhere. I don’t think that would be desirable or perhaps even possible. Street by street, block by block, we have different goals and rules for each place—look at the zoning map.

    The ideal TDR regime would pretty much preclude us saying, “Here’s a good corner for high rise development,” and zoning accordingly. Those sites would have to be deliberately zoned at lower density than is actually desired, depriving the city from communicating what is actually wanted or actually prohibited. It’s maddeningly indirect both from a policy standpoint and a development standpoint.

       —Larry Kestenbaum    Jun. 2 '06 - 08:25AM    #
  9. In Montgomery County, Maryland (often touted as the most successful TDR program in the country), TDRs sold for $11,000/TDR at their peak in 1996. In this program five acres of “send zone” land make up one TDR. The price is market driven and farmers find their own buyers (at least the county doesn’t offer “banking” services for TDRs).

    If we compare this process to the cost Ann Arbor is paying for greenbelt development rights, the same TDR credit would cost about $88,000 (based on 5 acres at TPM’s $17.6k average). Larry has a good point that this might be a little high to peak developer’s interest. In fact, even in Montgomery County the value of TDRs dropped to less than $7,500 by the year 2000 because developers found that there was more money in developing on larger lots and demand for TDRs dropped.

    That said, there are a number of ways to manage the cost of TDRs:
    1)change the “send zone” area value of a TDR
    2)change the “receive zone” bonus of a TDR
    3)change the cost of TDRs to developers

    #3 may be the most interesting. From Jennifer Hall’s comment, I take it that we really aren’t talking about a strict TDR program anyway. We are talking about adding regulations to our PUD ordinance (is that a good idea?). Some research I read said that TDRs do not have to reflect the full value of development rights in the “send zone”. If we plan to require developers to pay into the greenbelt fund instead of collect TDRs, then I see less of a case for charging the full value of the development rights because the developer doesn’t own the rights anyway. The city does through the green belt program. So the city could use a developer’s $10k contribution to purchase land at $17k/acre that they already planned to buy with greenbelt funds collected from the millage.

    Does this sound correct, Jennifer?

    Larry’s concern as to how this program would affect our ability to convey our desires for development seems much more critical to me.

    Another obstacle: where would the “receiving zone” be? NIMBYism is likely to reach a whole new level when this decision is being made.

       —Scott TenBrink    Jun. 2 '06 - 11:33AM    #
  10. “I mean, say the default height limit downtown were four stories (hi, Dave!), and the absolute highest waivable limit were 30 stories.”

    I realize that this is just an example but it caused me to think about of couple of things. First is the developer who decides not to fool with the TDR’s and configures a project based on, in this case, four stories. So I am thinking that the base height limit may need to be considered as something we can live with and credits need to be attractive enough so that the developers will actually build tall and I agree that it can become a problem to “deliberately zone[d] at lower density than is actually desired, depriving the city from communicating what is actually wanted or actually prohibited. It’s maddeningly indirect both from a policy standpoint and a development standpoint.” as pointed out by Larry Kestenbaum

    Then I thought about minimum heights. Shouldn’t we be ensuring some kind of minimums? Wasn’t this part of the game played for a minute at the State and Washington site?

    Lastly, building height cost is not linear. It may be difficult to factor in but each story does not cost the same as the last. For example, the seventh story of a building costs a lot more than the sixth due to the building being classified as ‘high rise’. Also at some point (14 or 15 stories) wind loads also start to cost the building more as they begin to dictate. So economically the developer wants to build to 6, then 15, then maybe 25 to 30 stories. I am curious to know if any of the credits can be graduated based on these real factors. Does MD do this or is their system linear?

    I don’t remember all of the numbers but when Lower Town started it was a good bit taller. I am sure thoughts like these were on the developer’s minds as they dropped stories and as they began to get close to these threshold stories they were sure to duck below them.

    This may be too complicated to factor into specific legislation but it would be refreshing if the approval process (planning staff and commission) at least took these factors into consideration when working with a developer.

       —abc    Jun. 5 '06 - 05:23PM    #
  11. wrt the problem of communicating intent that Larry brought up, I would guess the City would want to have a straight-up maximum height and a maximum-with-TDR height, with the latter communicating our intent? That way a developer wouldn’t have to wonder, when rounding up TDR credits, whether the site is really a “4, but up to 15 with TDR,” or “4, and we mean 4” story limit. (Keeping in mind, of course, that TDR would be on units, likely, and not completely linear with height.)

    Actually, come to think about it, specifying a base maximum height and a maximum-with-bonuses, such as TDR, starts to sound pretty familiar. Wasn’t there a report on this recently?

       —TPM    Jun. 5 '06 - 07:04PM    #
  12. sorry all, random comment to move the JWP thread out of the current comments section in hopes of letting it die.

       —Just a Voice    Jun. 26 '06 - 10:47PM    #
  13. Wow, you are really fixated on letting comments related to Palestine, and to divestment, “die”.


    Why do Zionists’ urges to kill, to personally insult, to cuss, and to cause death, surge into view, whenever the subject of Occupied Palestine comes up?

       —Blaine    Jun. 26 '06 - 11:55PM    #
  14. because you’re such an asshole?

       —rhümer maanger    Jun. 28 '06 - 04:23AM    #
  15. How can you possibly defend Israel, which has kidnapped and jailed over 8,000 innocent Palestinians, and still holds them, many with no pretense of a charge?

    That same Nazi Israeli army is tonight storming into starving Gaza, plunging it into darkness, and inflicting murder as it pleases.

    Now tell me, why do you find it unacceptible to divest from that?

    Can you Zionists answer that, without cursing or threatening harm?

       —Blaine    Jun. 28 '06 - 05:30AM    #
  16. Blaine,

    Please stick to the topic of this thread. What do you have to say about downtown development?

       —Young OWSider    Jun. 28 '06 - 06:03AM    #
  17. To answer your question, I did not introduce the subject of JWP or Palestine into this thread.

    That was done first in Comment number 12, above, by a commenter who, like you, is annymous.

    And, like you, he will go to some lengths to rub out Palestine comments, wherever they are found.


    Here is that Number 12 post, if you missed it:

    “sorry all, random comment to move the JWP thread out of the current comments section in hopes of letting it die.

    —Just a Voice Jun 26, 01:47 PM #”


       —Blaine    Jun. 28 '06 - 06:22AM    #
  18. sorry all, my bad

       —Just a Voice    Jun. 28 '06 - 03:57PM    #