Arbor Update

Ann Arbor Area Community News

City Council: A2D2 Recommendations

15. July 2007 • Juliew
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Monday, July 16 at 7:00 pm.
Ann Arbor City HallCity Council Agenda

Highlights:

  • Resolution to Approve Ann Arbor Discovering Downtown (A2D2) Zoning Recommendations
  • Resolution to Approve the First Amendments to Broadway Village at Lower Town Development Agreement
  • Amendments to the Farmer’s Market Ordinance to “replace the nine member City Market Commission with the five member Public Market Advisory Commission, clarify the role, functions and duties of the Public Market Advisory Commission, and make the requirements for vendors at the market consistent with Market Operating Rules.”
  • Amendments to the Open Space Ordinance to “provide a definition of active open space, modify the definition of open space, and provide minimum active open space requirements for multiple-family zoning districts.”


  1. Karen Sidney sent out the following e-mail regarding the Broadway Village vote. Whether you agree with her or not, she has some good points that I would like to see Council address. I am particularly disappointed with the affordable housing amendment.

    ————————————
    An amendment to the development agreement for Broadway Village at Lower Town got added to council’s agenda after the newspaper deadline. The agreement is being rushed to council because the developer says it is needed to get the $1 million in state loans and grants for the clean up. The city and developer want to start the clean up because the pollution is moving 1 foot a day, or about 1 football field per year. If the pollution is moving that fast, one wonders how much of it has already gotten to the river.

    THE BONDS Under the initial proposal, the city was supposed to issue $40 million in bonds to pay some of the cost to construct the project. The money to make the bond payments would come from the additional real estate taxes generated by the project. Only $4 million of the bonds would be used for the environmental clean up. The remainder would go to costs that are part of every large project such as on-site parking, demolition of existing buildings and site preparation. The revised agreement removes the requirement that the city issue bonds. However, the developer still gets to use the additional taxes generated by the development to repay a loan from a private lender. That means existing city taxpayers will pay all the costs of providing local services to occupants of the development for the next 30 years. However, city taxpayers will not be on the hook to make up the difference if the additional tax revenues are not enough to make the loan payments.

    AFFORDABLE HOUSING The revised agreement allows the developer to pay the city $2.6 million instead of providing affordable units in the project. The initial agreement required the developer to make 20% of the housing units affordable at 80% AMI. On site affordable housing was one of the conditions for getting the project approved as a PUD. A PUD allows the city to waive the normal rules, such as building height and parking spaces, in exchange for some additional benefit provided by the developer.

    ENVRONMENTAL CLEAN-UP The revised agreement guts the environmental provisions of the original agreement. It reduces the enforceable clean-up standard to the 1 in 100,000 required under state law from the 1 in 1 million required by the city because the higher standard is not “technically or financially feasible”. There is no documentation that it is impossible to achieve the higher standard, only that it would exceed the developer’s clean-up budget.

    Instead of requiring the developer achieve a certain result in exchange for getting $96 million in tax revenues, the agreement requires only a list of clean-up steps, with no requirement that those steps actually work. While these steps are more than required by the state, they may not result in a better clean-up. The original clean-up method proposed by the developer was abandoned because a small trial of the method indicated its use would make the problem worse. There is no guarantee that the results under this revised plan will be any better. The revised agreement effectively leaves the Michigan Department of Environmental Quality (MDEQ) in charge of the clean up. The proposed amendment contains cosmetic provisions giving the city some oversight of the clean up. These provisions are worth little because the city cannot interfere with MDEQ oversight. MDEQ oversight of the Pall 1-4 dioxane clean-up has resulted in closing one city water supply well and turning much of the west side of Ann Arbor into a brownfield.

    PARKING DECK The revised agreement requires the developer to transfer the parking deck to the city after it is built. The original agreement required transfer of the land along with an agreement requiring the developer to build the structure. The original agreement also required that the city and developer enter an agreement requiring the developer to operate the structure. It does not appear this provision is changed by the amendment. What is unclear is whether the parking deck will be an asset or a liability for the city. If the parking deck revenue is pledged to secure a loan to build the deck, as the developer wanted, the city and its taxpayers will get stuck with the bill to operate the 640 vehicle structure.

    WHAT THE DEVELOPER GETS The developer gets massive tax subsidies to help pay for the project, which will add 186 housing units and 290,000 square feet of commercial and retail space to the glutted Ann Arbor market. According to the developer’s website, this development has received over $75 million in subsidies, one of the largest in state history. Instead of $96 million in taxes going to schools, the city and other local governments, the developer gets to use $96 million to pay for the project. The result is $44 million less taxes to the school aid fund, $28 million less to the city and $24 million less to other local governments.

    WHAT THE TAXPAYERS GET The taxpayers get a massive new development on the edge of a single family neighborhood. The development is supposed to revise the area but most of the neighbors oppose it. The taxpayers get financial responsibility for a parking structure that benefits this project and which may require subsidies to operate or replace. Those subsidies may be paid for by increasing parking rates in downtown structures. The taxpayers get some additional environmental clean-up actions but no guarantee that those actions will work. The taxpayers get to pay for local government services used by occupants of this project for the next 30 years.


       —Juliew    Jul. 16 '07 - 06:03PM    #
  2. This is a pretty skewed version of the project. Not exactly the kind of work you’d expect from a CPA...

    An honest assessment would have been helpful from her….

    And Julie, what was disappointing about the affordable housing amendment?


       —todd    Jul. 16 '07 - 08:24PM    #
  3. Ahh Todd, as you should well know, all information is biased and all facts are open to interpretation. The intelligent person listens to people with lots of different viewpoints and makes up their own mind as to where they stand. Karen is under no obligation to write anything but what she believes to be true. You may not agree with her, and I often don’t, but she is smart, she pays attention, she knows a tremendous amount about the City, and she always has facts available to back up her statements. I have a lot of respect for her and will always at least listen to or read what she has to say.

    As for the affordable housing changes—originally this project was intended to provide a certain percentage of “affordable” housing on site. That has now been changed to payment in lieu of rather than providing any affordable housing on site. It just seems that a project of this size could manage to provide some on-site housing, especially since it was intended to be at 80% of AMI which is not exactly onerous.


       —Juliew    Jul. 17 '07 - 01:01AM    #
  4. There’s a material difference between inescapable bias, and information that comes from a CPA that discounts anything that might even vaguely resemble a positive in a veiled attempt to discredit the project. Cahill and company tried the same thing, if you’ll recall. Show the total math. Why is that so much to ask?

    I mean, have we learned nothing from the goings on of our Federal government in the last few decades? Everything is partisan now, and as a result EVERYONE gets screwed. No one wins.

    I’m still don’t understand that math behind this project, and this email does little to shed light on the situation….which is why it’s disappointing. She cloaks her email as a cost-benefit analysis….but she left out the benefit part. It’d be helpful to tell the whole truth. That’s all I’m saying. I’m sure she’s a neat lady, and very knowledgeable, but I sure would appreciate the whole story, that’s all….

    For the record (again), I’m still on the fence with this project.

    As to the affordable housing segment, gotcha.

    I still hate the way we handle that in Ann Arbor, but you’ve heard that from me 1000 times.


       —todd    Jul. 17 '07 - 02:11AM    #
  5. “she is smart, she pays attention, she knows a tremendous amount about the City, and she always has facts available to back up her statements.”

    Then why is she doing stuff like this?:

    “Instead of $96 million in taxes going to schools, the city and other local governments, the developer gets to use $96 million to pay for the project.”

    She’s leaving unstated the assumption that the alternative (whatever it would be) would produce this $96 million in property tax, and she’s ignoring the costs of services to the development (which she considered significant previously). Instead of devoting any time to those points, she goes on to give us what seems to me even less helpful numbers:

    “The result is $44 million less taxes to the school aid fund, $28 million less to the city and $24 million less to other local governments.”

    I don’t get it. My first reaction is to bristle because I feel like I’m being fed big numbers to impress me because the writer thinks I’m too stupid to understand a real argument. Probably that’s not what really is going on. And maybe I really am that stupid, I don’t know. I’d prefer something a little more rigorous, though, so:

    “she always has facts available to back up her statements.”

    could we get those?


       —Bruce Fields    Jul. 17 '07 - 02:33AM    #
  6. In what form are the $96 million in tax subsidies? Is it a check from the city for $96 million? Or is it giving the developers $96 million off future tax bills?

    Also, Karen and others should know, the city cannot subsidize the schools. The money for operating schools comes from the state and is set by statute.


       —Cooler Heads    Jul. 17 '07 - 11:10AM    #
  7. Let me see if I can help with the financial issues.

    The big news is that the City will no longer borrow $40 million up front and give it to the developer. In exchange, the developer is not going to be required to have 75% of the development pre-leased. So the project is now essentially up to the developer, and whoever he gets to provide the extra $40 million investment up front.

    Under the “tax increment financing” plan used to encourage development of polluted areas, all the future taxes from the project will be “captured” and given back to the developer. The state approved the “capture” of the school taxes as well. The total of all these taxes is the $96 million.


       —David Cahill    Jul. 17 '07 - 01:30PM    #
  8. Karen’s notes are based on recent documents issued by MEGA (Michigan Economic Growth Authority). Under state law, MEGA can grant TIF capture of school operating funds. The documents may be available online somewhere but I have only a pdf file. I quote:

    Resolution 2007-58: (meeting of MEGA June 19, 2007)

    (I am skipping numerous whereases and some of the resolveds)

    “the MEGA board authorizes the following amendments:

    a. An additional 5 years to complete the eligible activities for this project
    b. The reimbursement of interest if financed by a municipal bond and/or by a private financial institution or entity
    c. The proportional capture of taxes levied for local and school operating purposes up to a maximum of $96,375,347 as presented in Exhibit C: Table 2 of Attachment C of the work plan dated August 2004 for costs of non-environmental eligible activities, including interest, with the capture of taxes levied for school operating purposes being approximately $44,028,778.”

    Note that the state is able to capture the school taxes and return them to the developer, while local entities cannot, as stated by Cooler Heads. I may not have this straight, but I think that MEGA reimburses the schools from a different revenue source. As Cooler Heads is doubtless referring to, Proposal A has meant that school taxes are paid to the state, then the state pays schools (but the adequacy of these payments lately would be a topic for a different thread). All local entities (including the city, county, library district, WCC) simply lose those revenues.

    The form of the payment is that the property taxes for that property are assessed and collected, and the state then writes a check for those amounts to the developer. However, in this case, the developer would finance the costs of construction and development and the checks would go to pay off the loan.

    The other tax amounts cited by Karen are also in that worksheet that was part of the original brownfield plan approved in 2004. Since this was an amendment to the county brownfield plan, it is readily available from the county Planning and Environment department. I doubt that it is online but can be obtained in pdf form.

    Lots more facts where these came from. It does take research, though.

    I would just add that TIFs are not free money. When the city doesn’t collect taxes from a development, that means it also doesn’t have revenue to support the services needed by that development. That comes from the taxes paid by the rest of us. Think police, fire, transportation, solid waste, etc.


       —Vivienne Armentrout    Jul. 17 '07 - 01:33PM    #
  9. But Bruce has a good point. The CPA’s claims above of losing taxes is not really correct. The property as is won’t generate any taxes and is a bad area. I wish she would just say she is opposed to the project rather than make such inflated claims. I have doubts that her environmental claims are correct. The state approves this to provide an incentive to get bad sites cleaned up. David Cahill is right also that not using City bonds is a big deal. Despite the naysaying, it seems the City did a good job in pressing the developer all the way along.


       —sometimes reader    Jul. 17 '07 - 02:21PM    #
  10. “The CPA’s claims above of losing taxes is not really correct. The property as is won’t generate any taxes and is a bad area.”

    Technically not true. Unless the property has a zero dollar assessment, someone’s paying (or should be paying taxes) on it.

    As for the rest, what’s not correct about her claim? The taxes that otherwise would be paid to the city, county and state by a new development are instead going to the developer. You can quibble with her presentation and argue that without this deal, no development would take place. But her statement of the facts on the taxes is accurate as best I can tell.


       —John Q.    Jul. 17 '07 - 02:51PM    #
  11. “Technically not true. Unless the property has a zero dollar assessment, someone’s paying (or should be paying taxes) on it.”

    Sure. (Well, I suppose in theory that could change if the university bought it.)

    “But her statement of the facts on the taxes is accurate as best I can tell.”

    Not really:

    “The result is $44 million less taxes to the school aid fund, $28 million less to the city and $24 million less to other local governments.”

    I can only read that as literally claiming a loss of $96 million dollars (over 30 years, I suppose?).

    More generally, if she wants to make claims about how much (if any) this deal would decrease property tax income by, she needs to make some sort of argument about the likely alternatives.


       —Bruce Fields    Jul. 17 '07 - 03:37PM    #
  12. If you watch the meetings it becomes clear that Ms Sydney is very partisan and that she uses numbers to bash the city. She often omits facts to make her case. She has also been proven wrong on several occasions, the most famous being when she predicted a $30 million deficit that was totally non-existent.

    The council made good decisions all around on this development and the few detractors at public comment left out a lot of facts. Out of 4 speakers against the proposal there were 2 candidates for council, Sabre Briere and Mike Anglin, Anglin’s wife also spoke, (Where was David Cahill?) along with Karen Sidney. Not exactly a groundswell, just the usual bunch who are against anything the city does, perhaps partly because they are not the ones doing it.

    The 44 million that would have gone to the state school aid fund was a decision made by the state, they are bound to make it up to the fund and no school will receive a penny less per student.

    Certainly limited taxes are being paid at this site but the reality is that no developer has been willing to redevelop it for decades. The detractors say the city is “giving” the tax money up or even “paying” the developer. But unless the site is redeveloped there will be no taxes to “give” up. And, given that no other developer will take the site on, this is the best course of action. This is exactly what the Brownfield Statue was designed to do.

    It was clear last night according to the city’s environmental specialist that the “best available science” is being deployed to clean up the site. It will be cleaned up to a standard higher at least as high as the state requires and to clean up to A2’s higher standard would cost “100 million.”

    I still do not understand how Council member Johnson could turn his back on $2.6 million in affordable housing money in exchange for 29 units for yuppies making 80% of median income. As was pointed out last night, the city just spent $500,000 to leverage 120 units for families at 40 and 50% of median at Burton Commons. With the new funds the city can participate in building 400? units.

    It is also clear that from the very beginning the city applied a great deal of due diligence and carefully considered every detail of a complicated project and financial deal. I am happy they rejected the bond sale and that the development will go forward. It will create a whole new center of activity in Ann Arbor and it puts up a wall to further UM expansion in this area.


       —LauraB    Jul. 17 '07 - 04:15PM    #
  13. LauraB,

    You forgot to add in “Go Team Go!” at the end. Like todd, I’m on the fence about this proposal. But you’re spin on this proposal seems just as one-sided as you claim the detractors presented it. How many people showed up in support of the proposal? Does their absence demonstrate a lack of support for the proposal? If the school aid fund is shorted by 44 million, who do you think makes up that difference? Everyone else. As Vivienne pointed out, the lack of taxes from this development after it’s completed leaves the burden of providing services to the residents and businesses on every other taxpayer in town. They get to make up the difference. I didn’t see any mention of that in your comments. AS for the affordable housing, I think JulieW made the point that the developer was able to ditch the units that would have been integrated into the project in favor of a cash contribution. I thought the city was trying to integrate AH into developments, not create enclaves.

    “It will create a whole new center of activity in Ann Arbor and it puts up a wall to further UM expansion in this area.”

    Says who? What’s to prevent the University from utilizing the office space or any of the parking?


       —John Q.    Jul. 17 '07 - 04:41PM    #
  14. Re #10 and #11, Technically not true. Unless the property has a zero dollar assessment, someone’s paying (or should be paying taxes) on it.

    Sure, but those taxes won’t be “lost”. A brownfield plan uses tax-increment financing (TIF), so only the new/additional taxes will be captured. From the City/County/ISD/AATA/library’s point of view, the taxes would look as though nothing has happened on the property – they wouldn’t lose anything.

    It is fair to say that a TIF-financed brownfield redevelopment will require more services than in its current state without paying more in taxes – it’s not correct to say that the city will lose tax revenues. It just won’t gain any tax revenues.


       —Murph    Jul. 17 '07 - 04:49PM    #
  15. “As was pointed out last night, the city just spent $500,000 to leverage 120 units for families at 40 and 50% of median at Burton Commons.”

    Are there other examples of Affordable Housing Fund monies being invested besides Burton Commons ?

    Over time, I think the more units the commuity can point to out there in the real world that the AHF has paid for, the less that payments into the AHF (in lieu of building affordable housing onsite for a particular development) will feel like a ‘dodge’ on the part of developers.

    John Q asks: “How many people showed up in support of the proposal? Does their absence demonstrate a lack of support for the proposal?”

    I didn’t see the commentary segment of the meeting. CM Lowenstein’s comments at the table, however, seemed to indicate that there were some folks who showed up to express their relief that this development would finally remove this blight from this part of the city. The day-after replay on CTN is likely past that part of the meeting by now, but Friday at 7:30pm on Channel 16 represents an opportunity to check.


       —HD    Jul. 17 '07 - 05:10PM    #
  16. “it’s not correct to say that the city will lose tax revenues. It just won’t gain any tax revenues.”

    For that project, that would be true. But in comparing that project to almost any other new development in the city, it represents “lost” tax revenue because it alone escapes paying towards the demand for services it creates. You’re correct, the taxing authorities still get the pre-TIF taxes. But they also get a new level of demand for services that the development is not contributing towards the cost to cover. Who makes up the difference? Every other taxpayer in the city.


       —John Q.    Jul. 17 '07 - 05:41PM    #
  17. Murph (or anyone else),

    Does the TIF math apply to personal property tax, too? Or is it just for property tax?


       —todd    Jul. 17 '07 - 07:23PM    #
  18. Murph: I don’t think they have been able to assist many proposals like Burton Commons because there has not been enough money in the AH Trust Fund. There was the Stone School town homes a few years ago, the Mich. Ability Partners Development, etc. With the $2.6 from this one and the million plus from Glen Ann the city can really get to work on AH.

    John Q. This is a Brownfield project, a redevelopment of a “polluted, blighted site,” the first in the city so it is not comparable to any other development.

    There were supporters who spoke but how rare is that in A2? As I recall the public hearings when the development was up last time, there were actually more in favor than against. The Wall St. Condo assoc. voted in favor. The speakers against were the usual crowd who speak up against everything. Only one was from the neighborhood, a council candidate who lives on Broadway and is running on a no-growth platform.

    But, John Q., although it seems to happen in A2, is that how you want developments to be judged, by how many people come out in support or against?

    Ok, why don’t you put some meat on your argument against the project if you have one. Sure the project won’t pay taxes on the new development for years but that’s the way Brownfields work. But the key question is:

    What was the alternative???? Where has the competing proposal been for 10 years?

    How long should the people who live in this area have to put up with the blight? Who else was going to stop the flow of pollution?

    We often forget that our state is mired in recession, dead last among the 50 states. In most cities in Michigan people would have been falling all over themselves to approve this. It brings 44 million in State funds to A2 provide jobs for years to come, not only for all the people who will work there over the years, but for the trade workers too, you know those union people who make a living building things. It seems very likely that the developer has many tenants lined up or they would not have been able to attain private financing.

    There is great potential for this development to create a new center of activity in our city and it offers so much more, jobs, pollution clean-up, elimination of blight, $2.6 million that can be leveraged for 100’s of affordable units. etc.

    This project was approved by many bodies, the MDEQ, the state and county Brownfield Authorities, MEGA, the Drain Commissioner and now the A2 Council. Somebody said it last night; what would you prefer, decades more of blight and pollution?


       —LauraB    Jul. 17 '07 - 07:38PM    #
  19. “But, John Q., although it seems to happen in A2, is that how you want developments to be judged, by how many people come out in support or against?”

    No but you stated that the lack of opposition signified public support for the project. Is that how you want development to be judged in Ann Arbor?

    As for the project specifics, like I said, I’m on the fence about the project. There’s some benefits from the proposal. But anything that requires public subsidy to the degree that this project does raises red flags for me. The subsidies are not just the direct dollars collected through TIF but the indirect subsidies that will go on for years as other taxpayers have to cover the cost of services to this project and its residents. As for most of the other benefits, what development doesn’t “create” construction jobs, etc. The difference is that most other developments proposed in town don’t require the public subsidy.

    todd – TIF for brownfields includes personal property too.

    http://www.michigan.gov/deq/0,1607,7-135-3311_4110_23246-63525—,00.html


       —John Q.    Jul. 17 '07 - 08:40PM    #
  20. I agree with you JQ, a development should pay its own way but this was a major brown field, not unlike others that have been redeveloped using the same mechanism in Michigan. Lansing had a huge one a few years ago. The central question of all this remains:

    Without a brown field deal like this, how else was this site going to be redeveloped?

    Where were the competing proposals? Unless you have one, this was the best possible outcome.

    Given the history of the site it is apparent that it would have just sat there for another decade or so, the pollution running into the creek and the blight continuing. I think the city did a fine job on this. The bond sale was always the problem, they worked it out so the site gets redeveloped and the city does not take on any risk.


       —Dustin    Jul. 17 '07 - 09:15PM    #
  21. Washtenaw County has the Brownfield Plan for Lowertown posted on our Brownfield Redevelopment page. Washtenaw County’s Brownfield program has a number of informative documents posted there.

    Specifically, you can review all of the approved brownfield projects here.


       —Jeff Irwin    Jul. 18 '07 - 03:29AM    #
  22. Ok, so I read the links (thank you Mr. Irwin).

    Do I understand correctly that the City of Ann Arbor is getting a 650 space parking garage worth $23 million dollars out of this deal purchased by the State (MEGA). In addition, they are also paying for additional infrastructure, site preparation, and when this is added to parking structure, it’s a total of $32.5 Million? Is this right?

    Further, it looks like the environmental remediation is valued at $4 million, and the State (MEGA) is picking up the tab for this, too. Is this correct? It also appears that there’s another $3.75 in clean up funds set aside for the surprises that always pop up in this sort of environmental cleanup.

    The Wash. County link that Mr. Irwin shared also claims that Ann Arbor (or Wash. County, I suppose) will gain an estimated 582 direct and indirect jobs for this site. Is this in perpetuity? I would supposed not. That’s a pretty big number, though, eh?

    If I understand this math correctly, this seems like a pretty good deal.

    The alternative as I see it, for those who are upset about TIF, is for them to stop their complaining, put forward a plan to come up with the estimated $4 to $7.5 million dollars needed in cleanup costs out of thin air, and then let market forces decide what to do with the property, sans Brownfield funding. Maybe there’s some other Federal or State cleanup grant that I’m unaware of, I really don’t know. My understanding is that this project is tailor made for Brownfield funding. If it isn’t, well, then securing cleanup funds through some other mechanism should prove to be no problem at all.

    If find other means to clean up this site is something that the City does not want to do, I’d suggest that we’re getting quite a bit for the taxes that “we’re not getting”, for want of a better phrase.

    From what I can see, the biggest concern of Ms. Sidney is “maintenance” of the new infrastructure. I’d think that we can handle a large portion of this in structure charges, no? Unless I don’t understand the MEGA allowances, we were just handed the keys to a free 650 space structure. Seems like we can figure out a fee structure that covers the maintenance of the structure, and likely turn a slight “profit” that goes back to City funds.

    As for the rest of the infrastructure for the site that needs to be “maintained”, that’s certainly a cost to the rest of us, and should at the very least be quantified. If this number is reasonably low, I say let’s do it.

    I have to say, though, that I’m a bit amused by the “no growth” crowd suddenly arguing that we’re losing tax revenue if we build this project. Ironic, considering that they want to continually shrink/eliminate new projects, thereby screwing those who want density out of both tax dollars and (as LauraB thoughtfully reminded us) new jobs. 500+ jobs is no laughing matter, particularly for those who do not have them.

    If you take a look at the last Exhibit in the Brownfield Proposal for Broadway Village, it lists the taxes that are captured by the City, State, and County from this project. I encourage everyone to have a look at these numbers, as they are awful, awful large, and give you an idea as to how much money the City (forgive me here) pisses away when a project is delayed by several months or years, or when a project is rejected outright (as was almost the case with the relatively highly taxed Glen-Allen project). Obviously, you can reduce the taxes by a factor of ten for most medium sized projects, but it sure helps to see the lost money, IMHO.

    And if you all really care about collecting the proper amount of taxes from each property, get rid of this moronic Prop. A. Half of Ann Arbor is paying taxes on the property like it’s still 1985. How it is that Lansing officials haven’t figured out that this is the largest part of the problem in attracting business to Michigan, I have no idea.

    I guess that they think that Jeff Daniels is so damn charming that his Pro-Michigan commercials are enough to right the ship.


       —todd    Jul. 18 '07 - 05:25AM    #
  23. “Maybe there’s some other Federal or State cleanup grant that I’m unaware of, I really don’t know. “

    There is federal and state grants that can pay for this kind of clean-up. Does anyone know if the city ever explored those options? One issue may be liability and who was responsible for the contamination and the cost of clean-up.

    “I encourage everyone to have a look at these numbers, as they are awful, awful large, and give you an idea as to how much money the City (forgive me here) pisses away when a project is delayed by several months or years, or when a project is rejected outright (as was almost the case with the relatively highly taxed Glen-Allen project).”

    The tax revenue generated is the argument used by every developer and local official to justify every corn field plowed down for every strip mall in Michigan. Chasing tax dollars has been used to justify every bad planning decision in Michigan. It’s not a compelling argument in my book.


       —John Q.    Jul. 18 '07 - 12:21PM    #
  24. Sigh.

    Come on John Q. I’m not saying that we should “chase tax dollars” and approve/encourage bad projects.

    My point is simply that our decisions regarding development have financial consequences. Many Ann Arborites do not understand this.

    Further, the table illustrates that the City can add considerable funds to its coffers if it can shorten the time it takes to approve decent projects.


       —todd    Jul. 18 '07 - 12:59PM    #
  25. Hmm, from the Strathmore Lower Town website: “This project received one of the largest economic incentive packages from the State of Michigan in State history totaling over $75,000,000. Final approval by the City of Ann Arbor Council obtained October, 2003. Final approval by Michigan Economic Growth Authority obtained September, 2004. Demolition commenced January, 2007. Environmental remediation to commence June, 2007. Construction to commence September, 2007.” So although it is convenient to blame the City for the delay, I’m not sure that was really the thing holding Strathmore back. Especially since final approval by the city was in October 2003. I think the developers were trying to put together a funding package and were having troubles. I know they were having problems meeting the bond requirement of 75% pre-lease occupancy. Now that they don’t need the bonds, they also don’t need the pre-lease numbers so they can move on. Hence the amendment to the agreement, which was, you might note, approved by Council.

    The parking structure will be property of the City, but only after 30 years. The Lower Town development owns/manages/uses it until then. So I don’t think of that as a great benefit. We have no idea if that will be useful or not at that time.

    As for the increased jobs from this site, I think that number is highly inflated. Most of the tenants of this building will be related to the medical campus (Strathmore is specifically targeting that market). So the upscale residential condos are being built for doctors and the office space is being build for doctor’s offices. The retail is being geared towards banks and a chain restaurant or two. So most of the tenants will most likely shift here from other places in town (South State and the Ypsi/Arbor fringe most likely) but I don’t think we will see that many additional jobs.


       —Juliew    Jul. 18 '07 - 08:26PM    #
  26. I think that you are indeed correct that Strathmore is more to blame for these particular delays….I was just trying to use the math that was so readily at hand in the table to show how delays and outright rejects of other projects affect the bottom line. I was just using it as an illustrative tool.

    I didn’t see anything about the parking garage not becoming the City’s for 30 years. That’s a pretty important detail! A $23 million asset is nothing to sneeze at! Is the “Lower Downtown Development” that owns the structure another name for Strathmore? Pulling that off the balance sheet changes my opinion.

    I think that job numbers are probably inflated, too, but I think that even half that number is pretty good.

    Like I said, if there’s another way to cleanup that soil mess, it’s worth looking into.

    Well, I’m right back on the fence again (thanks for nothing, Julie :) ). It would’ve been wise to look into alternate ways of obtaining Fed and State funding for cleanup of this site…who knows, maybe they (City/County) already did??

    Mr. Irwin, could you shed some light?


       —todd    Jul. 18 '07 - 08:47PM    #
  27. Just another note on the affordable housing issue: Kingsley Lane also dumped into the fund in exchange for getting out of their previous obligation to have affordable units in the development. (That was the night that councilmember Greden was pushing the issue to the rest of the council at the same time his firm was representing the developer of KL. Nuthin’ like $ and politics.) The question came up here: What other examples has the AHF contributed to? It was answered by ‘not enough money to contribute’. Originally, the affordable housing plan was to require EVERY development to set aside some space. Now the city has to wait until the wheel comes ‘round often enough to be able to get one project to set aside space. This is not the way to steer AA away from becoming West West Bloomfield.

    For that matter, who’s to say Burton Commons won’t get a year into their development, decide their budget can’t accomodate the units (i.e. they won’t make enough back in a short enough period of time to cover their cost overruns, like clean-up), and comes back to the city to alter their agreement and simply dump money back into the fund? After all, that’s what the KL project did.


       —Marc R.    Jul. 20 '07 - 12:19AM    #
  28. Mr. Leopold,

    The county is always looking for ways to tap into state and federal incentive programs for cleaning up brownfields. On our brownfield website (linked to in earlier posts), there is a link to brownfield incentives that the county has secured for use in Washtenaw County.

    The main incentives we have been successful in ganrnering are assessment grants and a revolving loan fund grant. Information on those programs can be found on that same brownfield incentives page.

    SBT credits are another important brownfield incentive. Those incentives are recommended by the local brownfield authority, but are ultimately decided by the state MEGA board.

    Of course, there is also the CMI grant. (Clean Michigan Initiative). That program was the 600+ Million dollar bond initiative passed by citizens back in 1998. I remember it fondly because of the television advertisements with Spence Abraham – wearing a flannel – extolling the virtues of Michigan’s environment. I suppose it stands out in my mind because 2 years later he was named to the League of Conservation Voters “Dirty Dozen.” Needless to say, we have a better US Senator now.

    Unfortunately, CMI money is running out this year and the DEQ will no longer have this tool to address orphaned, polluted sites. Hopefully the legislators and the Governor will make a priority of finding dollars for this important task. It seems crazy to me that the Great Lakes State, sitting in the middle of perhaps the most valuable natural resource in the world, wouldn’t be more serious about water quality and maximizing that opportunity.

    So, I think we’re doing a good job of accessing state and federal support for cleanups in Washtenaw County. However, we’re always looking for ways to improve. If ANYBODY knows of federal or state money that we aren’t accessing, please let me know. We’ll go for it.


       —Jeff Irwin    Jul. 20 '07 - 12:59AM    #
  29. I’m still confused about what efforts were undertaken to clean up the Broadway Village site prior to the current plan. Was CMI money used to do some clean-up? If not, was there an application that wasn’t funded? Have other brownfield initiative programs have been used to address this problem?

    A football field a year sounds pretty fast-moving. Has the city and county leadership done what it can to no avail? What specifically has the county/city/state done for this site so far?


       —Anna    Jul. 20 '07 - 04:35PM    #
  30. Marc: The rules are, once a development agreement is signed with the city, the developer cannot change their mind and “dump money into the fund.”

    Kingsley Lane was never built so there was no contribution to the trust fund but this was agreed to in the development agreement and will stand if it is ever built.

    The $450K from the affordable housing trust fund that went to Burton Commons (over 100 AH units) was from what had accumulated in the fund from other small projects. As I remember from watching the meeting, Burton also got $1.5 in HUD funds and the development agreement is finished so they are locked in.

    The AH at Burton Commons is for families at 40 and 50% of median. (Family median is something like $75,000 so half that.) Exactly what A2 needs.

    If the units at Broadway were actually built, it would have been 29 units for singles, couples or 3 person families at 80%. People at 80% have a lot of options, they can afford to find something else. Remember the Ashley Mews debate and aftermath? At 80% it has been called “housing for Yuppies.” 80% gives AH a bad name.

    Instead of those 29 units at Broadway for yuppies, the $2.4 million can be used with other funds ala Burton Commons to build hundreds of units.

    In just a few years the city will have facilitated building over 250 units of AH for people from 20 to 60%, with Carrot Way, Stone School Town Homes, Michigan Ability Partners and Burton Commons and they have also contributed to a hundred or more apartment conversions to AH. Not bad when compared with past performance in A2.

    If Glen Ann is built the city will for the first time have some big money, $1.2 + $2.4 million to combine with HUD funds and leverage with partners to build 400 (?) AH units. This was what council talked about when they started the “payment in liew” and it looks like they now have a chance to make it happen.


       —LauraB    Jul. 20 '07 - 05:26PM    #
  31. I don’t think anything was done before hand and I don’t think the city applied for any grants. But in the city’s defense, this project has been “approved” for several years and I don’t think the pollution creep was discovered until after the initial approvals. I’m sure that once the city had someone lined up to do the clean-up, they figured it was off their hands.


       —John Q.    Jul. 20 '07 - 05:30PM    #
  32. Anna:

    The City/County never controlled the property so there was nothing they could do. The pollution was from decades ago when a dry cleaner was there.

    Under Mi. law the owner or new developer could have paved it over and put up a strip mall with no clean-up. From what was said by the city environmental expert at the meeting last Monday, “ the best available science” will be used to clean it up to at least the state standard. DEQ has to approve whatever is done.

    He said it would cost “100 million” to clean it up to A2’s standard as all the soil down to and into the water table would have had to be removed. Once the cleanup is complete and the cap is on, what is left of the pollution should be locked in place.


       —LauraB    Jul. 20 '07 - 05:32PM    #
  33. Marc:
    Whenever I saw Kingsley Lane discussed, council member Greden always stated that while he did not work with the developer, his law firm did so he would leave the table not just for the vote but for the discussion as well.


       —Ted Huey    Jul. 20 '07 - 05:53PM    #
  34. According to the latest AA Business Review, Kingsley Lane construction will be postponed six to twelve months. Deposits from prospective purchasers are being refunded.


       —David Cahill    Jul. 20 '07 - 11:05PM    #
  35. Laura is correct, but Marc R needs to get his facts straight before he posts. Burton Commons received significant tax credits to construct low-income units, so they cannot and will not come back and ask to do cash in lieu. Kinglsey Lane, on the other hand, was a PUD with no tax credits, meaning they could do cash or units. And Greden never recused himself from voting on Kingsley Lane because his firm never represented them (I know because I asked him).

    I think the suspended construction of Kingsley Lane is an illustration of the poor market. Peter Allen could’ve moved forward with construction right now, but it wouldn’t have been prudent to do so.


       —P.J.    Jul. 23 '07 - 12:12AM    #
  36. You ‘know because you asked him’? Wow. That’s almost as verifiable as reading it on the Interweb.

    1. I was there the night that the Kingsley Lane developers were coming back to city council to change their development agreement. I spoke against it in the public comment section. I didn’t see you there, Laura. Nor did anyone come up and speak on Kingsley Lane’s behalf other than the developers themselves. Council approved the change.

    2. No less than 2 AA News reporters informed me that Miller Canfield was involved in representing Kingsley Lane. Miller Canfield employs one Leigh Greden. I insisted to the mayor that Greden should recuse himself. The mayor said it wasn’t his role to tell anyone whether they should or shouldn’t vote on council.

    So, perhaps, PJ, you should think about actually being present before you assert that someone else is in the wrong.


       —Marc R.    Jul. 24 '07 - 12:05AM    #
  37. Peter Allen, urban visionary/professor is the developer of Kingsley Lane. It would be easy to ask him who his attorney was for Kingsley Lane.

    If the answer to the first question is yes, Miller Canfield represented Kingsley Lane, then it would also be fairly easy to determine if the council member in question left the table. I find it hard to believe that an attorney of Greden’s stature would not recuse himself if his firm was representing someone with a development before council. He has always done that when I have been watching.

    If what Marc says is true, the mayor gave the answer I would expect; how is he supposed to know which law firm is representing this developer or the next one?


       —Dustin    Jul. 24 '07 - 04:44AM    #
  38. Video of the July 16 City Council meeting is now posted. The Broadway Village discussion begins at 2:52:43.


       —Juliew    Jul. 24 '07 - 02:43PM    #
  39. Apparently, nobody cares what goes on at the Ann Arbor Public Market.

    For shame Ann Arborites, for shame…


       —fuzzbollah    Aug. 4 '07 - 07:54PM    #
  40. Lots of people care they just may not agree with extremists. The Farmer’s Market serves my needs very well and is well run. Soon it will be remodeled and have solar panels. What’s not to like!


       —LindaB    Aug. 5 '07 - 01:18AM    #
  41. Oh, Linda. Don’t you know? Change is bad. Change is horrible. Ann Arbor must be preserved in amber for future generations.


       —OWSider    Aug. 5 '07 - 12:17PM    #
  42. Solar panels are just what is needed at the Public Market. What is not needed are vendors who don’t grow or actually produce what they sell, and certain vendors that monopolize a “public” space, with the blessing of the Market Manager and the Community Services Administrator Jayne Miller. The recently disbanded Market Commission was attempting to make changes to rules that were unfair, and overturned their approval of the city-staff generated “new rules”. City Council did not listen to their own citizen commissioners, and now the market is essentially OK for cheaters, and starting to become an unwelcome place for organic growers and local (meaning Washtenaw County) growers, and in favor of outsiders from Bellville and Livingston County. If you’re truly interested, see my new blog: www.arbormarketwatch.blogspot.com


       —fuzzbollah    Aug. 15 '07 - 04:36AM    #
  43. I’d be more convinced that the market was full of “cheaters” if you named some names, fuzzbollah.


       —Edward Vielmetti    Aug. 17 '07 - 04:07AM    #
  44. The market is not “full of cheaters”, Ed, just a few “rotten apples” spoiling the whole barrel. There are many hardworking vendors who produce a great product there. Its just that they wind up being undercut by those unscrupulous few. I will be naming names on my blog shortly. Been busy lately.


       —fuzzbollah    Aug. 23 '07 - 05:12PM    #
  45. This week’s Business Review (http://blog.mlive.com/ann_arbor_business_review/2007/10/lower_town_ready_to_proceed_to.html) brings us up to date with the latest announcement of “soon, really soon” for the Broadway Village/Lower Town project. According to the article, the developer has obtained $185 million in private financing. Except – oops – half of that is being invested by the state pension system. The developer is trying to meet a December 31 deadline for a $1 million state environmental cleanup grant. The construction loans haven’t closed yet. Kevin McDonald (assistant city attorney) notes that some minor documents still need to be worked out with the city, “such as some easement issues”. Those won’t prevent the commitment to the construction loans. “This groundbreaking, eight years after the initial vision, will come only after building permits are secured” (says the reporter).


       —Vivienne Armentrout    Oct. 18 '07 - 07:13PM    #