5 reasons why Washtenaw Avenue improvements don't require a new tax-capturing authority
Improving Washtenaw Avenue is personal to me: I live about one mile from it and spend a lot of time driving on it.
I also wish I spent more time walking along it, but I learned long ago - when my children were in a stroller - that trying to cross Washtenaw made me feel like I was playing a life-size version of the “Frogger” video game.
Local officials are proposing the creation of a corridor improvement authority that would collect taxes in a specified district along Washtenaw Avenue to make improvements along the corridor between Ann Arbor and Ypsilanti.
Lon Horwedel | AnnArbor.com
Still, I’ve grown comfortable living near the Washtenaw commercial center, even if some of that proximity still results in more driving than seems necessary in my own lifestyle.
Making improvements to the corridor that involve making it pedestrian-friendly and commercially viable will benefit the community. I’ve been particularly concerned about that as certain obvious vacancies on the east end of the road in Ypsilanti continue to await a new occupant, like the former Pinter’s Flowerland and nearby vacant Hollywood Video.
However, news that Washtenaw County’s effort to improve the corridor involves creating a new tax-capturing authority fills me with dread.
Here are five reasons why I still need to be persuaded that creating a Corridor Improvement Authority is a good idea:
1. We don’t need another public body in the development business. And I’m not just saying that until the economy improves. If we haven’t learned anything from Ann Arbor’s repeated failures to develop on its own property - despite plenty of attempts - then take a drive past Water Street in Ypsilanti. It looks better now that grant funding drove building demolition. But the financial picture from the city’s general fund carrying the bond payments for years, until some of the land is sold, is still ugly. Any move that improves Washtenaw by creating a public body that can buy and develop property is dangerous.
2. At some point it’s up to the property owner to decide if the property is underutilized. I live near the former Frank’s Nursery at Yost, and can’t help but wonder why nobody uses the former outdoor area next to what’s now the Dollar Tree. And the rest of the stores in that center - like Casual Male XL and a uniform store - don’t require the number of parking spaces available. But is that government's role to fix? What kind of incentives does the county want to wave in front of the owner to change anything? And why should that owner get any incentives over any other owner? If that owner - local attorney Duane Renken - is satisfied that the mall is operating at its highest and best use, do the rest of us, or our governments, need to force a change?
3. There isn’t a high vacancy rate in the corridor now. However, there are some high-profile vacancies, and there’s a difference between the two scenarios. One example: The former Farmer Jack on Washtenaw is a large retail space designed for a specific use that isn’t attracting a tenant. Ditto the former Circuit City space in Arborland. Some day, the market will return - or the landlord will get tired of carrying vacant space. In the meantime, I believe there’s an impressive level of occupancy along the corridor, particularly in this economy. McKinley continually finds tenants for Glencoe Crossing. The newer center south of it on Washtenaw is full. Courtland Plaza, near the Dairy Queen to the east, has two spaces available. At the same time, the single buildings on that corridor - the former Taco Bell, the former Hot n’ Now, the former gas station at the corner of Hewitt - all are priced as redevelopment opportunities or for startups. The market hasn’t found them yet, and putting tax dollars to subsidize the redevelopment while the market is stalled is money misspent.
4. Couldn’t cooperative zoning among the communities yield a similar result? Why does the county need to capture tax increases - preventing other jurisdictions from reaping those benefits at the same time - to accomplish a zoning vision? As an example, look again at the former Frank’s Nursery. Every December, Christmas trees are sold at the edge of the parking lot. That tells me there’s room to carve an outlot parcel in that parking lot. That could be achieved at the zoning policy level, clearing the way for market forces to make it work - if it’s truly viable.
5. Setting up a system that depends on capturing increases in taxable values is presumptive. I do not believe that Washtenaw County’s commercial real estate values will fall into infinity. And I trust that, at some point, they’ll rise again. But right now, that’s not the case. And next year, based on what I hear about distressed properties and landlord concerns, I don’t believe that’ll change. Arborland, one of Ann Arbor’s largest taxpayers, lost $847,300 in taxable value in 2010. The Kmart in Ypsilanti Township lost $764,900. Rebuilding that tax base could take a decade or longer. In the meantime, a system would be set up to use money that doesn’t exist. In effect, it also tells municipalities that, after losing tax revenue over recent years, and probably in years to come, they won’t rebuild coffers from one of their most visible commercial corridors.
Paula Gardner is Business News Director of AnnArbor.com. Contact her at 734-623-2586 or by email. Sign up for the weekly Business Review newsletter, distributed every Thursday, here.
Comments
Mick52
Thu, Sep 16, 2010 : 8:32 p.m.
Whoa, don't usually side with a liberal but I have to go with limberalNIMBY on this one. Arborland a success story????? Huh? Hard to get into, hard to get out of. Huron Village not so bad, but not enough parking. Washtenaw is ugly. Very ugly, too many signs, convoluted, and confusing. Something has to be done. I think lacking a special district is probably the only way anything will get done. And I agree re: traffic congestion. It's not that bad, gets backed up a little but not for long. Drivers are fairly ignorant of how to move at rush hour. If Washtenaw is plugged up, take Packard. The best example though is 1st St, Ashley St. and 4th Ave. At rush hour everybody does bumper to bumper Main St. go one block east and no traffic on 4th Ave. Go one and two blocks west and drive freely on Ashley and 1st St, clog free. Never could figure out why people like to virtually park on Main St. Girl watching I guess.
Paula Gardner
Thu, Sep 16, 2010 : 10:22 a.m.
@Murf, Here's the difference between those properties: The Ann Arbor property is 7 acres and is privately owned, after going through foreclosure when the original developer (who bought all of the properties involved in private transactions) lost the property to the bank. Water Street is over 30 acres, the city owns it after assembling the property -some of it through condemnation - and the financing was through municipal bonds, which the city has to make payments on. The city is the Water Street developer.
Murf
Thu, Sep 16, 2010 : 9:37 a.m.
Funny how Water Street keeps popping up. Doesn't Ann Arbor have something similar with that land across from Whole Foods/Barnes & Noble? Much like with Water Street, businesses were forced to move (i.e., Stucchis) and yet nothing has been done with the land nor the remaining deserted buildings. At least Water Street is now sans buildings.
Paula Gardner
Thu, Sep 16, 2010 : 7:12 a.m.
@liberalNIMBY, Here are a two redevelopment success stories from Washtenaw Ave, neither of which involved the DDA: Arborland and Huron Village. I'd also say Liberty Lofts downtown was a success story - it may have touched the DDA in the form of some sort of grant being awarded during the process, but it was driven by the developer. And yes, it's important to bring Ypsi into this - that's a major point of the Washtenaw CIA, to unite the planning efforts of the 4 governments along the road. I talk to developers for a living, and they would probably be as stunned as I am at the suggestion that self-taxing authorities or DDAs have to be involved in redevelopment successes. When they are - great. But you can have one without the other. And this district's basis is not about property owners spending their own money on improvements - it's about tax capture. And the structure of the CIA, per state law,specifically gives it the authority to acquire property: A municipality may acquire private property under 1911 PA 149, MCL 213.21 to 213.25, for the purpose of transfer to the authority, and may transfer the property to the authority for use in an approved development, on terms and conditions it considers appropriate, and the taking, transfer, and use shall be considered necessary for public purposes and for the benefit of the public. And it gets to borrow money to do that: (1) The authority may with approval of the local governing body borrow money and issue its revenue bonds or notes to finance all or part of the costs of acquiring or constructing or causing to be constructed property in connection with either of the following: (a) The implementation of a development plan in the development area. (b) The refund, or refund in advance, of bonds or notes issued under this section. Also, DDAs have a paid director and (usually) paid staff. I'm curious about whether the final recommendation for the Washtenaw plan includes that.
AlphaAlpha
Thu, Sep 16, 2010 : 5 a.m.
"please seek answers to your questions by, you know, talking to someone." No questions. Bad idea. If anything, you might seek to question your own assumptions and motivations.
LiberalNIMBY
Wed, Sep 15, 2010 : 9:46 p.m.
Before even more people pile on the "small government" bandwagon, a couple of comments: 1. Can the author (or any nodding commenters) provide just *one* example of a redevelopment success story anywhere in the country where a self-taxing/DDA-type district was not involved? Far from being "additional layers of government," these districts epitomize small government -- a bunch of property owners who want to spruce up their neighborhood and increase their property values, spending their own money on improvements. 2. I don't think our citizens/city council will be voting for any "handouts" to private developers, anywhere, ever, including for the Library Lot. This is a whole different issue. My impression is that the only city money that would be spent outright is on street improvements, a la Stadium Blvd. 3. The city of Ann Arbor (and Ypsi if you need to bring them into this) has failed to generate viable projects as of late, but the *DDA* has partnered in successful projects in the past, and hopefully will do more in the future. The DDA is buffered from immediate political influence, which is probably the reason it's been able to accomplish things. Its spending doesn't come at the expense of other city services. (And wait, isn't the DDA giving multi-million-dollar handouts to the city?) I would urge you to talk with some of the friendly folks on the DDA or developers who know how this stuff works before forming an opinion. This taxing authority may or may not work in this area, but please seek answers to your questions by, you know, talking to someone. While I'm at it: Ann Arbor does NOT have traffic problems. Try driving around a metro area in a state that doesn't have the highest unemployment and outmigration rates. Sheesh.
tosviol8or
Wed, Sep 15, 2010 : 9:43 p.m.
@speechless, I'll preface this with an admission that we aren't going to agree; it's apparent our values are different. I disagree completely that the issue is simply one of finance. The bigger issue is whether central planners and a vocal minority ought to be able to foist their vision of how things ought to be on a market that speaks daily to the contrary. This is a classic example of a focus on "how to get" instead of "what to want." Washtenaw turned out how it did because people flock to it because they like how the area is. 20th century planning didn't cause those maladies in a vacuum. Even if it had, much was gained in the bargain, too--time and choices being foremost among them. The market, as measured by human action, has responded overwhelmingly in favor of the trade-off. Now a few thousand planners are trying to tell millions that they're all wrong. No, the issue isn't one of just tax capture; it's whether this project should be done at all. The planners don't bring that up for debate; they decide unilaterally that it should, then wonder how to pay for it. At any rate, there is a far cheaper way to achieve the idyllic mixed-use neighborhoods now so much the rage among urban planners. Just change the zoning in all-residential neighborhoods to allow commercial buildings and multi-family housing. The narrow streets and sidewalks are already in place. That won't fly, of course, because despite the contrary protests of planners and developers, most people don't want to live in densely populated neighborhoods.
treetowncartel
Wed, Sep 15, 2010 : 9:28 p.m.
And don't tell me the sidewalk on Packard is a viable alternative, that has been a mess and impassable be tween Carpenter and Golfside for months now.
treetowncartel
Wed, Sep 15, 2010 : 9:23 p.m.
Just bring the whale back to Arborland and everything else will fall into place! In all honesty, widening the road between the Old Toumy Hills gas station and US 23/Carpenter makes complete sense. This road gets a lot of traffic, look at roads like Telegraph and Woodward for an example of how traffic could move smoother. There also needs to be a nice size sidewalk that can accomodate bike and foot traffic simulataneously, with actual curb cuts at the intersections and driveways, from the Water Tower in Ypsi to where the sidewalk system appears on both sides of the street at Brockman and Washtenaw. This would also include a way for foot and bike traffic to not have to cross over the entrance/exit ramps at 23. I'll say it again, if they can come up with the money to build a bike bridge to no where across US 23 at Geddes, when there is a path just south of there under 23 along the river, they can find a way to get a path built here.
Speechless
Wed, Sep 15, 2010 : 7:14 p.m.
"... cite the same problems and come up with the same solutions, with walkability, mass transit and mixed-use development the centerpieces of all of them...." That's because mid-20th century planning based on suburban sprawl and long-distance commuting has led to major road congestion, a far greater dependence on foreign oil, an increased loss of community, reduced daily exercise, and public environments hostile to anything except car travel. Washtenaw Ave. did not overnight become a parking lot during evening rush hours and a 'race track' at other hours. Likewise, it will resist a sudden transformation into a friendlier, safer boulevard open to several modes of transportation. Right now, however, is a perfectly fine time to get started. The issue here is whether or not another tax-capturing scheme is really needed.
tosviol8or
Wed, Sep 15, 2010 : 3:48 p.m.
@Craig Lounsbury, that points out the paradox of DDAs and CIAs statewide. They name the number one problem as congestion, and the number one goal as greater density. Beyond the goal of some developers getting taxpayers to cover their costs, it appears that a stated preference for public over private transit leads to a policy goal of killing the automoblie. I've visited many municipal DDA/TIFA/CIA websites, and it strikes me odd that so many of them--regardless of size, density, culture, demographics--cite the same problems and come up with the same solutions, with walkability, mass transit and mixed-use development the centerpieces of all of them--and I do mean ALL of them. I'm beginning to think the real problem may be the state has too few municipal consultants, because the ones we do have seem to be able to identify only a single, one-size-fits-all solution.
DagnyJ
Wed, Sep 15, 2010 : 3:27 p.m.
Announcerman! I know it was you. :-)
Craig Lounsbury
Wed, Sep 15, 2010 : 12:40 p.m.
For those who cite traffic gridlock at rush hour as a reason for action are dreaming if they think anything will change. There is no way making Washtenaw Ave more bike/pedestrian friendly is going to put a dent in traffic. Especially if the process actually encourages and results in economic development. Economic development with respect to unused or underused space will make traffic "worse". It will result in more traffic in to the area as well as more stop and start traffic as folks attempt to pull in and out of places they previously drove past. I don't say this as a negative merely an observation.
Speechless
Wed, Sep 15, 2010 : 12:17 p.m.
There needs to be a firm, consistent public voice in planning decisions. To allow such decisions, which affect everyone, to occur randomly by default — according to the accumulated financial bets made by developers over time — is not a mature or responsible way to run a city or county. The sheer pleasure of driving along Washtenaw through this corridor between 4:00-6:00 p.m. on weekdays ought to be recognized as a crown jewel for a past planning process overly determined via non-planning. Supposedly we do live in a democracy, and so developers, as modern aristocrats, shouldn't have sole voice in these matters. Allow us mere serfs, through elected representation, to weigh in on the future of where we live. At the same time I agree with the sentiment that it's hardly necessary to set up a whole new authority which draws taxes away from other entities. A less formal committee with reps from Ann Arbor, Ypsilanti, the townships in between, as well as the county, should be plenty sufficient. Let such a group help coordinate plans for Washtenaw Ave. with no taxing powers provided. Similar to what others have suggested, direct proposals for badly needed transportation improvements through the AATA (bus, commuter train, park & ride) or through local elected bodies (sidewalks, bike paths, parking).
John Q
Wed, Sep 15, 2010 : 10:44 a.m.
"The true intent of the Washington Corridor Authority is to involve the City in financing the private mixed-use development of properties along Washtenaw Avenue. The plans for commercial-residential construction are more detailed than any changes for Washtenaw Avenue itself." How?
Craig Lounsbury
Wed, Sep 15, 2010 : 9:52 a.m.
@TheAnnouncerMan007: "I was sad to see AA's first REAL mall Arborland torn down and rebuilt as it is now." If memory service me Arborland is on its third incarnation. It was originally an open mall. Then it was remade in to an enclosed mall. Now its back to an open mall. The only local icon that has changed more is the turf on the northeast corner of Stadium and Main.
Craig Lounsbury
Wed, Sep 15, 2010 : 9:33 a.m.
Its rare that I read an opinion piece that I agree with 100%. This is one of those occasions. Paula you expressed in words, much better than I could have, exactly how I feel on the issue. I too travel Washtenaw Ave frequently, living just north of Packard and Platt.
Veracity
Wed, Sep 15, 2010 : 9:02 a.m.
Aaudubon's post is a ruse which attempts to convince readers that the major objective of the Washtenaw Corridor Authority is to focus on "improving sidewalks, intersections and transit shelters." However, these improvements can be added to the "City of Ann Arbor, Michigan FY2010-2015 Capital Improvements Plan." The costs for these improvements should be affordable without increasing taxes or requiring a special assessment. The true intent of the Washington Corridor Authority is to involve the City in financing the private mixed-use development of properties along Washtenaw Avenue. The plans for commercial-residential construction are more detailed than any changes for Washtenaw Avenue itself. Without City funding, developers are unlikely to obtain adequate financing for their projects. Otherwise, the proposed projects highlighted in yesterday's article will have already been submitted for approval by the Planning Commission and the City Council. This situation is similar to the effort by Valiant Partners and Acquest to get the City to float $8 million of bonds to pay for part of their downtown hotel/conference center proposals. Without the City's debt issuance, neither of the developers will be able to obtain adequate funding for their projects. Let us not allow citizen tax dollars to subsidize private developers and the sizable fees that they give themselves even before their projects are built.(IMHO)
Jay Allen
Wed, Sep 15, 2010 : 8:18 a.m.
This is not directly about the article per se`, but this is a general thought that really has me up in arms. To whoever is moderating on this shift at AA.Com, I would ask that BEFORE you pull this you take time to THINK about what I am saying. Get with Ed, Stefanie, or Tony before you yank this. As of late I have witnessed much better moderation at AA.Com. Seriously, kuddos. But every now and again we still that "A post was removed because it contained opinion". This does occur. Okay, those are the rules to the game and as long as everyone plays by said rules we are on an even playing field. Then this? I will state why I think each piece is wrong and then I will state what I think. We are allowed to, right? 1. You are trying to compare Water Street in Ypsi to anything in AA? Really? Paula I was born here and I was in Ypsi when Ypsi was a viable place to live, not the ghost town in which it has become. Ypsi has no money and AA does. As long as there is a U of M, AA will always be a vibrant place to be. But your lack of proof to what you are trying to say leads you to use the Water Street debacle that has been EXPLODED time and time again here on AA.com as proof against government? My Thoughts. Government as a hole is too big and too controlling. That I do agree with. There are failures within Government and this is why major change is needed in the November elections. But I would not draw the line on a project such as this. I think this is something that has been needed for a LONG-LONG time. 2. This goes directly to the set back laws established. Once Washtenaw Avenue was built and finished, what were they to do? Now answer that before moving on. The ONLY thing left was "parking lot". And Paula, you OBVIOUSLY do not remember there was a MORE viable business in Frank's Nursery before Frank's was there. Highland Appliance was once in Casual Male and you could NOT GET A PARKING place as the place was ALWAYS full. If my memory is still intact it was called "3 Sisters" and it was next door to Highland Appliance. The bank has always been the bank in the 47 years I have been around. My Thoughts. Through the years Washtenaw has went through several metamorphosis. The change has actually been constant. Thus what was established has been outgrown and/or outdated. I was sad to see AA's first REAL mall Arborland torn down and rebuilt as it is now. But now it is more vibrant than it once was. Just as the NEW Washtenaw Ave WILL BE if people allow change to occur. 3. "and putting tax dollars to subsidize the redevelopment while the market is stalled is money misspent."
Veracity
Wed, Sep 15, 2010 : 8:13 a.m.
Well said. The "improvements" for the Washtenaw corridor as described in yesterday's article will actually worsen congestion if more people were to live in the proposed residential developments. Furthermore, converting a center lane of Washtenaw Avenue into a median with trees or into a five-mile railway system will impede traffic flow. The latter will be very costly to build and maintain, will be less convenient than bus service and will not pay for itself. The tax-capture and special assessment recommendations for financing the Washtenaw corridor "renovation" is nothing more than a ploy by private developers to get Ann Arbor residents to subsidize their projects and their profits.
Henry Ruger
Wed, Sep 15, 2010 : 8:08 a.m.
Whoa, where did you beam down from, Ms. Gardner? Have they tracked you down and hauled you away yet? If not, maybe there's hope for AnnArbor.com and, indeed, for the whole community.
aaudubon
Wed, Sep 15, 2010 : 8:06 a.m.
While a Corridor Improvement Authority can function much as Ms. Gardner describes, the concept of its potential use for Washtenaw Avenue would be to function less as a redevelopment authority and more as a formal way to address zoning, master plan and public infrastructure improvements across jurisdictional boundaries. Certainly the focus is intented to be on the transportation improvements desperately needing for the corridor, such as improving sidewalks, intersections and transit shelters. And while cooperative planning and zoning is absolutely a key tool these communities will be using, it often takes a more formal body to tap into federal funding that is available for both planning and implementation efforts. Simply having a CIA formed would make us more competitive for TIGER Grants, Sustainable Communities grants and other HUD/DOT/EPA funding opportunities that would allow us to not only plan for these improvements, but implement them as well. Within a month or so, the committee recommendations for planning, zoning, transportation improvements and future coordination will be available in a Strategy. This report will give a much more detailed explanation of the work that has been done, and all of the tools the communities feel are appropriate for addressing Washtenaw Avenue. Please take a look and stay interested!
glimmertwin
Wed, Sep 15, 2010 : 7:43 a.m.
You obviously read the comments on yesterday's story. It appears many have the identical thoughts you do.
Bonsai
Wed, Sep 15, 2010 : 7:23 a.m.
Well done. Here's #6: Continuing to set up tax-capturing enclaves is not a sustainable way to operate government and provide public services. Siphoning off tax money wherever it appears to help development (debatable in this case) only leaves the rest of us with less. The argument that there is "no loss" in taxes because the district only captures the increase is bunk, unless we assume that any development would only take place because of improvements funded by the district.
Rasputin
Wed, Sep 15, 2010 : 7:07 a.m.
Thanks you for your clearly laid out points.
BigMike
Wed, Sep 15, 2010 : 7 a.m.
Bravo, Paula!
braggslaw
Wed, Sep 15, 2010 : 6:55 a.m.
Amen
AlphaAlpha
Wed, Sep 15, 2010 : 5:59 a.m.
Outstanding article, and comment. Refreshing common sense. You are correct on all points Ms. Gardner.