Arbor Update

Ann Arbor Area Community News

City Council: Post-Holiday Cleanup

6. July 2008 • Juliew
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Monday, July 7 at 7:00 pm.
Ann Arbor City HallAgenda

Highlights:

  • Proposal to allow grass clippings in compost (revisited)
  • Resolution to approve a payment in lieu of taxes for Burton Commons Apartments
  • Resolution to approve the sale of three of Washtenaw Affordable Housing Corporation’s Property in order to allow for a merger with Avalon Housing
  • Resolution to add Project Grow funding to FY09 budget
  • Resolution to approve a conceptual plan to redesign Fifth Avenue and Division streets between Packard and Beakes to be more bicycle and pedestrian friendly (revisited)

Note: This Monday, July 7 is the last day to register to be able to vote in the August elections. Click here for a registration form. The City of Ann Arbor’s Clerk’s Office only lists a P.O. Box, but I think you can take it to the office at 100 N. Fifth Avenue, Phone: (734) 994-2725.



  1. Project Grow funding was restored for the ’09 fiscal year. Yahoooooo!!!!!

    (And I got to meet Vivienne A. :))


       —TeacherPatti    Jul. 8 '08 - 01:39AM    #
  2. Project Grow funding: restored; Anglin moved to postpone, but the sentiment at the table was to just vote on it; Rapundalo and Higgens cautioned that this was not the sort of event they wished Council would repeat in the future (the lack of discipline to stick to a budget that was previously passed)

    Fifth and Division Conceptual Plan: passed; Greden was convinced to support it apparently in part because he felt that there would be opportunity for Council itself to manage the project block by block, as opposed to just accepting a blanket reduction of auto traffic lanes from 3 to 2;

    Grass Clippings: passed; they’re allowed in yard waste to be picked up; great enthusiasm from Council for the City to make publicity efforts (so that residents can return to the practice of collecting their grass clippings for pickup as quickly as possible??)

    Tax abatement for Mercedes Benz: passed with no discussion; tax abatements used to be big and controversial news in Ann Arbor; different economic climate then versus now


       —HD    Jul. 8 '08 - 01:45AM    #
  3. There were a few items not on the agenda. The first was the approval of $650,000 to buy the Tios building. (Appraised at about $400,000—$192,000SEV, so the owner is making out well.) The idea was that it will become a parking lot at some time. Sigh.

    Also, Council gave out the first two DDA liquor licenses. And the first one went to, drum roll please, Everday Cook! Mary Campbell came to say that Everyday Cook wasn’t actually closing and she would like the license. The second one went to Salsaritas on Liberty (who, it was pointed out, has been waiting much longer than Everday Cook).


       —Juliew    Jul. 8 '08 - 03:20AM    #
  4. thanks for the summaries, julie and others:


    Fifth and Division Conceptual Plan: passed; Greden was convinced to support it apparently in part because he felt that there would be opportunity for Council itself to manage the project block by block, as opposed to just accepting a blanket

    this is pretty telling. usually council wants the ‘process’ to work and gets cranky when there’s too much citizen involvement. but for council to let staff do the work of planning a traffic calming roadway project? no, they must be involved to decide block-by-block the style of curb-cut.


    There were a few items not on the agenda. The first was the
    approval of $650,000 to buy the Tios building. (Appraised at
    about $400,000—$192,000SEV, so the owner is making out
    well.) The idea was that it will become a parking lot at some
    time. Sigh.

    this was an interesting procedural move too – greden moved early to discuss this behind closed doors, haltingly citing ‘attourney-client…’, then saying he wanted to discuss land acquisition.

    it’s always interesting the ways in which the city spends our tax money. $650k for a parking lot? i can only imagine this is in some way related to hoped-for project of the new city hall, across the street (at another many 10s of millions of dollars)?

    in part my frustration is due to the fact that $7k was cut from the budget for project grow (of course, reversed and restored in this meeting), something which can actually have some long-term impact on our local economy, health, and mitigate the effects of poverty. but spending another $650k on more parking (check the empty counters just about anytime – lots of parking available: http://tinyurl.com/34plll) is par for the course (where you can now drink, thanks to the liquor license).

    ah, politics.


       —bob kuehne    Jul. 8 '08 - 11:11AM    #
  5. There was previously discussion (some of it on AU) of whether eminent domain would be or should be or could be used to acquire the Tios property.

    This deal, it appears, was initiated by the owner of the property. If the City accepted the owner’s offer to sell at 50% more than appraised value, then it’s fair to wonder if the Ann Arbor News will follow suit with respect to its parking lot behind Tios (which would presumably be a part of the footprint of the parking structure that will serve the police/courts facility).


       —HD    Jul. 8 '08 - 12:27PM    #
  6. The State Equalized Value of a property is not the same as the appraised value. The appraised value can only be determined by an appraisal. I bet there are properties all over A2 that have a value that is 50% in excess of the SEV. Our house is (hopefully still) worth more than the SEV and way more than the Taxable Value. My parents house that they have owned for a long time, is worth well over 50% of the SEV.


       —LauraB    Jul. 8 '08 - 03:26PM    #
  7. LauraB – 200%, rather than 50%. Opposite fraction. :)

    More accurately, the taxable value may not be higher than the SEV. The SEV is generally equal to or close to the assessed value. The assessed value is 1/2 of the local assessor’s estimate of the True Cash Value of the property.

    In this case, Juliew refers to “appraised value” – not bothering to investigate the Council materials, is this an outside appraisal that the City had done to determine the market value of the property?


       —Murph    Jul. 8 '08 - 04:54PM    #
  8. Sorry, I guess I didn’t mean appraised value, I meant assessed value. In other words, that the SEV was about $200,000 so the, uh, “conventional street value” would be about $400,000. At least in Ann Arbor over the years, that has held pretty true for most (certainly not all) neighborhoods.

    Or in this case, the owner will get a lot more by selling it to the City than if the City had decided to take it, and the City doesn’t look like the bad guy. I don’t think the property has much value except to the City, so an appraisal wouldn’t tell you much.


       —Juliew    Jul. 8 '08 - 05:57PM    #
  9. According to today’s AA News, the owner of Tios found that the land had been sold out from under his business by reading yesterday’s paper and from customers.

    I would expect such callous disregard for a tenant from a landlord. The City, however, should have had the common courtesy to notify the business owner.


       —David Cahill    Jul. 9 '08 - 06:33PM    #
  10. Mr. Cahill: Do you actually practice law? I am surprised to learn that a member of the bar would suggest that the purchaser of real estate would interfere in the landlord/tenant relationship and contact the tenant of a seller directly to tell them of the impending sale of the sellers property!

    Until the actual closing, something that could be months away or may never happen at all; the buyer has no business interfering in the landlord/tenant relationship of the seller.

    If it was to fall on anyone, it was clearly the obligation of the seller to inform the tenant of the possible sale of the property, not legally but perhaps as a matter of courtesy. It was certainly not the duty of the buyer.

    Your zeal to bash anything the city does should be tempered by the reality that your spouse is now a part of the establishment. If contacting the tenant was the proper course as you suggest, why didn’t she call them herself or did she ask the city administrator to do so?


       —Dustin    Jul. 10 '08 - 04:47AM    #
  11. If the city had publicly voted on Monday the 7th to acquire the property, I don’t see how informing the business owner the next day on the 8th would constitute interference in the landlord/tenant relationship. I don’t think the city had any obligation to inform anyone beyond what was stated in the public meeting. But if they had done so, I can’t see where there are any legal issues involved.


       —John Q.    Jul. 10 '08 - 05:19AM    #
  12. Oh, Dustin, you are such a stitch! Of course neither the landlord nor the City had a legal obligation to notify Tios. Even if the City had notified Tios prior to the vote on Monday, Tios has no “standing” to prevent the sale of the property to the City.

    I was just talking about common courtesy.

    Within a couple months the City will be Tios’ landlord. What a fun relationship this new landlord will have with its angry new tenant.

    After the closing, Tios will have a lease with the City which runs until June, 2009. When the balance of power on Council changes this November, the new majority could decide to extend the Tios lease when it comes up for renewal, rather than tear the building down.

    Since there has been some question about the valuation of the property, here is the resolution adopted by Council on Monday:

    Title

    Resolution to Approve the Purchase of and Appropriate Funds for the Acquisition of 331 East Huron Street, Ann Arbor from Dean Zahn Properties, L.L.C. ($605,000 plus Closing Costs/ NTE $615,000 total) (8 votes)

    Memo

    Attached for your review and action is a resolution to approve the purchase of and appropriate funds for the acquisition of 331 East Huron Street, Ann Arbor, Michigan, in the amount of $605,000.00.

    On June 24, 2008, Dean Zahn Properties, LLC, owner of the real property located at 331 Huron Street, presented the City Administration with an unsolicited offer to sell the real property to the City for $605,000.00 with the further condition that the City would assume all responsibilities and obligations under the existing lease with the current tenant and that the City would assume all of the closing costs for the sale. The offer was made subject to the City and the DZP execution of a purchase and sale agreement by July 10, 2008.

    On behalf of the City, the City Administrator acknowledged the offer to sell the real property and necessary approval of the City Council for the negotiation of a purchase and sale agreement for the real property.

    An appraisal of the real property performed by Gerald Alcock Company, LLC, as of October 8, 2007, listed the market value of the property as $605,000.00 Given the recent valuation date, the City Administrator, in accordance with Section 1:320(4) of the Ann Arbor Code, is not recommending a further appraisal be performed and that the use of this appraisal is a reasonable approach to ascertaining the value of the real property.

    The following budget is proposed for the acquisition of the real property:

    Project Acquisition Costs:

    Purchase Price $605,000.00

    Closing/Incidental Due Diligence $ 10,000.00 Total Appropriation (NTE) $615,000.00 Sufficient funds are available in the General Fund FY09 Fund Balance for acquisition of the property.

    Acquisition of the real property is recommended.

    Resolution

    Whereas, The City of Ann Arbor received an unsolicited offer from Dean Zahn Properties, LLC to sell the property located at 331 East Huron Street, Ann Arbor, Michigan;

    Whereas, The Offer to Sell for the amount $605,000 consistent with previously fair market appraised valuation of the real property;

    Whereas, The Offer to Sell was contingent on the assumption of all responsibilities and obligations under the existing lease of the property and the assumption of all costing cost for the transfer;

    Whereas, The Administration is supportive of acceptance of the proposed offer to sell subject to the negotiation of an acceptable purchase and sales agreement to all parties; and

    Whereas, Sufficient funds for the acquisition, including all appropriate due diligence and closing costs, are available in the General Fund FY09 Fund Balance;

    RESOLVED, That City Council approve acceptance of the Offer to Sell 331 E. Huron Street, subject to the negotiation of an acceptable purchase and sales agreement;

    RESOLVED, That the City Administrator and the City Attorney are authorized and directed to begin negotiation with the property owner to finalize a purchase and sales agreement effective immediately for the offered sale price and subject to an acceptable assignment of the existing lease and such other terms as may be in the best interest of the City and its potential future use of the real property;

    RESOLVED, That the Mayor and City Clerk are authorized and directed to execute the negotiated purchase and sales agreement; and

    RESOLVED, That City Council appropriate from the General Fund FY 09 Fund Balance and increase the nondepartmental expenditure budget for FY 09 for the amount of acquisition, including appropriate due diligence and closing costs, not to exceed $615,000.


       —David Cahill    Jul. 10 '08 - 01:32PM    #
  13. Speaking only for myself, I am very disappointed that the city purchased this property, plainly with an eye toward replacing a viable restaurant location with an unnecessary parking structure.

    What’s done is done, however, and I hope and expect that my council representatives will renew Tio’s lease next year.


       —Larry Kestenbaum    Jul. 10 '08 - 02:05PM    #
  14. David: Thank you for posting the resolution. So there was an appraisal and at the sale price.

    Larry: I agree that it would be a shame to see Tios have to move but this looks like the seller decided they wanted to sell. The city was not going to condemn or anything. Tios would almost surely have to move anyway or have their rent go way up with a new owner who had costs to cover. It should not be hard for Tios to find a new location.

    For the city to pick up a property that joins their site is a smart move. It also solves the parking situation.


       —LauraB    Jul. 10 '08 - 04:34PM    #
  15. It’s not hard to understand that the city wanted to buy the property, and I realize there was little time to respond. I’m sure that Tio’s could find another location, and that won’t even be necessary for a while.

    What I’m really opposed to is the heedless expansion of blank, dead, institutional (and parking) use of downtown street frontage, at the expense of active, small retail uses. This sort of thing is hard to create (see, e.g., the failure of the stores in Ashley Mews) and very easy to destroy.

    No parking structure is needed at this location, and certainly this would be an awful place for a surface lot. This is a destructive “solution” in search of a problem.


       —Larry Kestenbaum    Jul. 10 '08 - 05:41PM    #
  16. “I hope and expect that my council representatives will renew Tio’s lease next year.”

    Would they need to increase the rent at to justify the cost of buying the building? I share the concern for downtown retail, but buying up property and renting it at below-market prices doesn’t sound like a very efficient solution.


       —Bruce Fields    Jul. 10 '08 - 06:31PM    #
  17. Would they need to increase the rent at to justify the cost of buying the building? I share the concern for downtown retail, but buying up property and renting it at below-market prices doesn’t sound like a very efficient solution.

    Maybe not — would the city have to pay school system property taxes? If not, the current rent might justify the investment.


       —mw    Jul. 10 '08 - 07:18PM    #
  18. If the city isn’t using the property for public purposes, they have to pay taxes, etc. just like any other private property owner. It’s all spelled out in the state laws and court cases in this area and while I don’t have those details handy, I doubt that renting a building for a restaurant meets the definition of a public purpose.

    I would ditto Larry’s comments about parking lot expansions. Is that really needed in that area?


       —John Q.    Jul. 10 '08 - 08:56PM    #
  19. Isn’t this where Dave Cahill jumps in and says “In Michigan, there can be nothing wrong with the car”?


       —Dale    Jul. 10 '08 - 09:12PM    #
  20. If the city isn’t using the property for public purposes, they have to pay taxes, etc. just like any other private property owner.

    Hmmm — is that true of the U as well? I was under the impression that at one point they’d been acting as a landlord while keeping properties off the tax roles. Not so?


       —mw    Jul. 10 '08 - 10:25PM    #
  21. In Michigan, there can be nothing wrong with the car. 8-)

    However, there is plenty wrong with the Tios transaction.

    Plus, with the construction of the new underground parking structure at the Library Lot, there will no longer be a parking shortage in downtown.


       —David Cahill    Jul. 10 '08 - 11:56PM    #
  22. Well, I’m guessing the city is thinking ahead to a time when there is more need for parking downtown…like when they build a convention center, for example. Just as a hypothetical, of course.


       —Young Urban Amateur    Jul. 11 '08 - 03:04AM    #
  23. I don’t think most of the rules apply to the U.


       —John Q.    Jul. 11 '08 - 03:22AM    #
  24. YUA, I believe we will never have a need for more parking—neither private nor public—than we currently have downtown. As gas prices (and prices of all other products and services that depend on consumption of fossil fuels) increase, demand for parking spaces will continue to fall. As traffic decreases, more street lanes can be converted to parking, if needed. The planned underground structure is a very questionable investment at this time (and will be more so in the future.)

    If the purchase of the property adjacent to city hall is intended for parking, it’s also a questionable investment, unless it’s part of a more comprehensive plan to avoid the construction of the library lot structure. Well, maybe we can develop such a plan after the fact. I’m really curious to know the thinking here.


       —Steve Bean    Jul. 11 '08 - 06:14AM    #
  25. Steve Bean says “YUA, I believe we will never have a need for more parking—neither private nor public—than we currently have downtown.”

    I think I’ve heard something like this before…

    “Everything that can be invented has been invented.”
    Charles H. Duell, Commissioner, U.S. patent office, 1899


       —imjustsayin    Jul. 11 '08 - 05:11PM    #
  26. One line of attack on the police courts building is that there would be no where to park.

    Now opponents of the building are attacking the decision to buy land that would allow parking?

    I’m not saying I think parking expansion is a good idea. I’m undecided on that.

    I actually think the city should stop subsidizing city employee parking so there are incentives to get people to carpool, bike, and walk. Give the money we pay for parking to employees in their paycheck, let them decide if they want to spend that money on parking or they’d rather ride their bike and have more money for beer. That would be one step to opening up some additional parking options.


       —Chuck Warpehoski    Jul. 11 '08 - 05:44PM    #
  27. imjustsayin, if you’re interested in the information and reasoning behind my thinking, let me know and I’d be happy to share more of it. In any case, I’ve begun that process with the DDA board, which is what matters.


       —Steve Bean    Jul. 11 '08 - 06:24PM    #
  28. I just read the resolution. We were asked to buy the property and because we can we will. No reason for the need or possible use. Did that pass unanimously?

    I’ve heard many claims of lack of transparency on the part of council over that past several years, but this is the first action that stands out to me as clearly withholding information from the public. I’m surprised that this hasn’t been met with similar outrage as previous issues (although not much surprises me anymore.) Did anyone who saw the meeting hear any verbal explanation?

    Maybe I’ll look up the MB tax abatement resolution that HD mentioned (unless someone can share it.) Abatements are now supposed to be only granted to businesses that have a positive impact on community sustainability (to put it briefly.) Was that one unanimously approved? Sorry I didn’t think earlier to propose a question on abatements for the council/mayor candidate questionnaire.


       —Steve Bean    Jul. 11 '08 - 06:43PM    #
  29. Now opponents of the building are attacking the decision to buy land that would allow parking?

    Chuck, this kind of glib distortion is unworthy of you.

    Let’s go over this again, slowly.

    (1) I support the police-courts building, or whatever method the city council chooses to find a home for the district court. As I keep pointing out, Washtenaw County has plans for the space the district court occupies in the courthouse.

    (2) That position is not at all inconsistent with defending the fragile ecology of small storefronts and restaurants.

    We don’t have to choose between courtrooms and storefronts. Downtown has room for both.


       —Larry Kestenbaum    Jul. 11 '08 - 09:35PM    #
  30. Steve, the resolution did not pass unanimously. Anglin, Briere, and Suarez voted no.

    This deal was put together in secret by the Council’s Budget and Labor Committee. The committee members didn’t tell their colleagues about it until last Sunday, the day before the Council meeting.


       —David Cahill    Jul. 12 '08 - 02:03AM    #
  31. David-

    You never answered the question: if you believe there should have been more information conveyed to the public or Tios, why didn’t your wife say anything about anytime Monday, or direct the Administrator to tell Tios after she found out about the deal?

    There’s a bigger issue that (surprise) David has missed. If the Council was approached by the building owner and asked to pay a price certain, disclosure of those land negotiations by Councilwoman Briere or any other City Council member to Tios or anyone else would likely have been a breach of fiduciary duty. That’s why land purchases are closed under the OMA— otherwise, the price of buying land paid by the taxpayers would rise as private developers out-bid the taxpayers upon learning of the negotiations.


       —Bill T.    Jul. 13 '08 - 12:30AM    #
  32. Tsk. Bill T., I suggest you review the Open Meetings Act. Negotiations for land purchase may, but need not, be held in Council closed session. As for fiduciary duty, a Council member’s duty is to the public, not to the members of a secret club.


       —David Cahill    Jul. 13 '08 - 01:56AM    #
  33. Surely there are situations from time to time when a public official’s duty to the public reasonably mandates keeping some matters in confidence.

    If a council member were to disclose something which harmed the city’s position in a negotiation or lawsuit, at a cost of millions of dollars, the citizens would be rightly outraged, no?

    This reasoning can be abused, admittedly, to keep matters secret which should be public. One partial guard against this is to insist that any such deliberative secrets be strictly short-term temporary.


       —Larry Kestenbaum    Jul. 13 '08 - 03:37PM    #
  34. David: read “may be closed” for “are closed” in Bill T.‘s comment and it doesn’t change his argument.


       —Bruce Fields    Jul. 13 '08 - 07:34PM    #
  35. Sure it does, Bruce. It is up to Council to decide whether or not the purchase of land is discussed in closed session. Council could have decided to discuss the Tios purchase in open session. It didn’t. It decided to keep the whole thing secret.

    With only one buyer and one seller, I don’t see how the price would have been driven up by handling this matter publicly.

    As to what Sabra thought, did, didn’t, do, or whatever – people have already been told that I don’t speak for her. If anyone wants to contact her and ask, her e-mail address is:

    SBriereATa2gov.org.


       —David Cahill    Jul. 13 '08 - 08:14PM    #
  36. The open meetings act limitation on discussing real estate only applies until an offer is made in public.

    “To consider the purchase or lease of real property up to the time an option to purchase or lease that real property is obtained.”

    http://www.legislature.mi.gov/mileg.aspx?page=getObject&objectName=mcl-15-268

    Once the offer was made publicly, there shouldn’t have been any problem with anyone from the city informing Tios about the proposal.


       —John Q.    Jul. 14 '08 - 04:17AM    #
  37. In response to Larry’s critique to my post, let me clarify:

    There are people who oppose the Tio’s.

    There are people whose attacks on the police courts building have focused heavily on the lack of parking.

    The overlap between the two is what confuses me. (I tries to make a text Venn Diagram to explain, it just didn’t work.)

    Now, I agree I may have jumped the gun here. David Cahill has been one of the more vocal critics of both projects, but I don’t actually remember him making a big deal of the parking issue (his concerns were more budgetary).


       —Chuck Warpehoski    Jul. 14 '08 - 02:34PM    #