Debate continues as City Council prepares to take final vote on Ann Arbor DDA ordinance changes
Supporters of the Ann Arbor Downtown Development Authority are circling the wagons in advance of tonight's City Council meeting where major changes to the DDA are being considered.
The Ann Arbor/Ypsilanti Regional Chamber joined six other groups in sending a joint letter to the City Council, urging council members to vote against placing new restrictions on the DDA.
"We believe the DDA has done and continues to do good and important work for Ann Arbor's downtown, benefitting all of Ann Arbor," the letter states.
Downtown Ann Arbor's Main Street as it looked on a summer night last year. Ann Arbor Downtown Development Authority officials argue the success of the DDA is visible in the success of the downtown, which they consider the best in the state.
Ryan J. Stanton | AnnArbor.com
Mike Henry, chairman of the local Arts Alliance board of directors, sent a separate letter to the mayor and council, also lobbying against passage of the ordinance changes. Henry said the rush to impose new restrictions on the DDA seems ill-considered and comes across as punitive.
"We believe that the Ann Arbor DDA should be applauded for its work, not burdened with rushed, poorly considered funding cuts," Henry wrote.
Council Members Stephen Kunselman, D-3rd Ward, and Sumi Kailasapathy, D-1st Ward, are co-sponsoring changes that would place new limits on the DDA and slow its revenue growth, taking nearly $1 million in tax revenues away next year alone.
The changes also would impose term limits on DDA board members so they could serve up to two four-year terms.
The council voted 7-3 to give initial approval to those changes at its last meeting. The council is expected to take final action tonight.
"I'm not surprised there's a lot of support for the DDA," Kunselman said in response to the letters received from the chamber and other business and community leaders.
"I support the DDA as an institution," he said. "I just don't think they should have a $1 million increase in their budget."
The DDA essentially is an arm of the city government tasked with improving the downtown and managing the city's parking system.
The fact that the DDA is seeing higher-than-expected tax revenues from growth in the downtown is a testament to its good work, reads the letter sent to council by business leaders.
"In short, the DDA is working as intended, benefiting the downtown and the community at large, within the authority and guidance set by council in 2003, and we do not believe there is a demonstrated public need to amend the city's DDA ordinance," the letter states.
The DDA weighs in
AnnArbor.com recently obtained 50 pages of emails traded between DDA Director Susan Pollay and council members in response to a Freedom of Information Act request. In one of those emails, Pollay wrote about what she believes the ordinance changes would mean for the DDA.
"For a City Council that set forward 'Economic Development' as one of its chief priorities for 2013, this proposed ordinance amendment seems a strange first project, because it directly works against the council's goal to encourage new jobs, new residents, and a stronger local economy," she wrote in the email to Council Member Chuck Warpehoski, D-5th Ward.
Susan Pollay
Ryan J. Stanton | AnnArbor.com
The DDA's budget is large ($24.1 million), she said, but 32 percent goes to debt service obligations, and 48 percent covers costs of running the city's parking system, including a transfer of 17 percent of parking revenues to the city's general fund. Depending on the year and the projects, she said, about 12 percent goes toward capital improvements, including maintenance of parking facilities.
"Most of the remaining amount goes to DDA grants for things like solar demonstration project at Farmers Market, go!passes, free energy audits for all downtown businesses, holiday lights, spring cleanup," she wrote.
"Reducing the DDA's TIF means there is less money available in the DDA budget to support important projects that help us meet our mission to encourage downtown vitality and private reinvestment."
The DDA is partially funded through TIF — or tax-increment financing — revenue, meaning it captures the increase in taxes resulting from new construction and improvements downtown.
Records obtained by AnnArbor.com show the amount of tax revenue the DDA captures from downtown properties has grown substantially over the last three decades.
It started at $127,258 in 1984, grew to $1.2 million by 1987, hovered between $2.3 million and $2.7 million throughout most of the '90s, and reached nearly $3.2 million by 2003, records show.
It was up to $3.7 million by 2012 — a growth of $842,729 or 29 percent over the last decade. The DDA's original 1982 TIF plan predicted it'd be up to $8.7 million by 2002, which never happened.
Although budgets, audits and other financial documents from both the city and the DDA show the TIF grew from $3.2 million to $3.7 million from 2004 to 2012, Kailasapathy, a certified public accountant, repeatedly has argued the TIF nearly doubled from $2 million to $3.9 million from 2004 to 2012 — based on a March 4 email from City Treasurer Matt Horning that claimed as much.
No one from the city or DDA was able to explain the discrepancy over the weekend, but Kailasapathy said she was inclined to believe the treasurer's email over what the other records show.
Tom Crawford, the city's chief financial officer, said on Monday he and the treasurer looked into it and the difference between the $2 million figure and the $3.2 million figure is due to the fact that the DDA used to be able to capture school taxes to pay for pre-1994 debt by the DDA.
"It was essentially a pass-through for debt service and was not available for other DDA purposes," he said. "For analytical comparison purposes, this is excluded from the figures the city has been providing related to the DDA TIF refund discussions."
In other words, the higher number is the actual tax capture, but the city is using lower numbers subtracting out the school taxes for comparison purposes.
Beginning in fiscal year 2009-10, the DDA no longer has any pre-1994 bonds due and therefore does not collect any school millages.
It's still not clear why the treasurer's numbers show the TIF reached $3.9 million in 2012 when the DDA's audit and other financial records show it was $3.7 million.
TIF projected to grow
According to the city's estimates, the amount of taxes being captured annually by the DDA could grow as high as $4.8 million over the next two years due to new downtown high-rises.
Kunselman and Kailasapathy argue the extra money should be refunded to other taxing jurisdictions, including the city of Ann Arbor, Ann Arbor Transportation Authority, Washtenaw County, Washtenaw Community College, and the Ann Arbor District Library.
The DDA isn't projecting the same large increases, though. Its two-year budget plan submitted to the city shows TIF revenue projections of $4 million in 2013-14 and $3.8 million in 2014-15.
"It's interesting that there seems to be a misunderstanding from how the supporters are referencing that the DDA is going to take severe cuts to their budget when that's not the case," Kunselman said. "In the numbers I've seen, there would be a slight reduction in their TIF capture in the fiscal year 2014 budget, but it would bounce back up pretty quickly and increase in the years ahead."
Council Member Stephen Kunselman, D-3rd Ward, he wants to see the DDA's wealth redistributed so more public improvements can be done in areas of the city outside of the downtown.
Ryan J. Stanton | AnnArbor.com
That includes $559,000 going back to the city, $196,000 to Washtenaw County, $124,000 to Washtenaw Community College and $52,000 to the Ann Arbor District Library.
In her email to Warpehoski, Pollay argued taking money away from the DDA would be a bad move for the city, because the city benefits directly from the DDA's projects.
"Everything the DDA puts money into becomes the property of the city — e.g. new sidewalks, water mains, streetlights, trees, etc.," she wrote. "The DDA TIF comes from new taxes from new construction. The city portion of this TIF is 14.41 mills. The DDA's total TIF comes from 27.4854 mills, which includes county, WCC, library taxes, as well as city.
By approving the ordinance changes, Pollay said, the city would be losing all the revenue the DDA captures from other taxing authorities — money that gets put into projects that benefit the city.
"The city gets double the bang for its buck by having the DDA fully funded," she said.
Redistribution of wealth
Two decades ago, city parking garages were crumbling from lack of maintenance, and the DDA took over, made extensive renovations and improved operations, the Arts Alliance argued in its letter to council, calling the DDA the "backbone" of the downtown.
"The city and other taxing entities have realized significant improvements in revenues over the DDA's lifetime," the letter reads.
Kunselman said whether growth in the downtown tax base means the DDA is doing a good job is debatable since all that seems to be getting built are student high-rises. He thinks the University of Michigan is driving that growth, not the DDA, and he wants to see a redistribution of the DDA's wealth so more public improvements can be done in areas outside of the downtown.
"Of course, any improvements made downtown are good for everyone, but the notion that even more money is going to provide even more benefit flies in the face of the diminishing-returns theory," he said. "That money could be well spent on things that are in need right now."
David Blanchard, chairman of the city's Housing and Human Services Advisory Board, told council members in an email on Friday the board has deep concerns about reducing the DDA's funding.
"Our fear is that the proposed changes will force the DDA into a position of not being able to continue its valiant commitment to affordable housing in Ann Arbor," reads a resolution passed unanimously by the board last Tuesday. "The DDA has had a long commitment to increasing the viability of the downtown area and affordable housing is critical to that work.
Rene Greff
Rene Greff, co-owner of Arbor Brewing Co. in downtown Ann Arbor, also entered the debate over the DDA this past weekend, sending a lengthy email to council members. Greff, a former DDA board member, argued the TIF funding mechanism is a "very good deal" for the city — and any attempt to limit it is at best "ill-informed and short-sighted," and at worst "self-serving and reckless."
"I have to say that I have seen a lot of ugly and petty politics (along with a lot of careful consideration and political courage) over the past decade and a half that I have followed council, but Councilman Kunselman's most recent move to curry political favor by attacking the DDA may be the worst yet," she wrote.
"It would be bad enough if this transparent power-play were just ill-conceived and self-serving, but the fact that it also does economic damage to the city makes it completely unconscionable."
Kunselman, who is considering running for mayor next year, has said he believes the changes he's proposing will be good for the DDA in the long run and will restore public trust and confidence.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's email newsletters.
Comments
Roadman
Mon, Apr 15, 2013 : 10:30 p.m.
Kudos to Sumi Kalasapathy and Steve Kunselman for placing some checks and balances on the DDA - which should be more aptly named the Ann Arbor Back Scratchers' Association. Wealthy business owners reap the benefits of DDA funding at the expense of A2 taxpayers and the politicians who approve these generous payouts are themselves generous to the politicians when campaign funding is needed. The booting of Hieftje off the DDA via ordinance amendment is a pure power play. People at City Hall are surreptitiously laughing at the Mayor - and it's not just over his Festifools mask. There has been a steady erosion of his influence at City Hall since the Council Party lost its majority. Sumi Kalasapathy has been a powerful advocate of fiscal responsibilty and her vast experience as a CPA was sorely needed on City Council. She was the key force behind these proposed DDA technical financial amendments and their passage would enhance her prestige and status as an effective elected representative.
DJBudSonic
Mon, Apr 15, 2013 : 8:25 p.m.
For me the most troubling thing about this article is the constant counter-comments added by the article's author, Mr. Stanton. If you think that the line between public funds, politics and business is blurred by the DDA, the line between objective reporting and political mouthpiecing is obliterated by Mr. Stanton. Commenting on your own reporting is unprofessional, at best.
1bit
Mon, Apr 15, 2013 : 10:17 p.m.
Agree with Steve here - I think it's refreshing to have feedback given from the writer of the article.
Steve Bean
Mon, Apr 15, 2013 : 9:36 p.m.
I appreciate Ryan's comments. I much prefer to know his thinking in order to determine if his writing is biased than to speculate. I give him the benefit of the doubt that wording is unbiased and point out when it appears otherwise. Some of our elected officials could learn a thing or two from his practices.
Westfringe
Mon, Apr 15, 2013 : 5:24 p.m.
"Our fear is that the proposed changes will force the DDA into a position of not being able to continue its valiant commitment to affordable housing in Ann Arbor," reads a resolution passed unanimously by the board last Tuesday. "The DDA has had a long commitment to increasing the viability of the downtown area and affordable housing is critical to that work." Affordable housing doesn't belong in downtown Ann Arbor. It drags down the value and the communities around it. If you are looking for affordable housing the entire SE corner of MI has you covered.
Westfringe
Mon, Apr 15, 2013 : 5:23 p.m.
"Kunselman said whether growth in the downtown tax base means the DDA is doing a good job is debatable since all that seems to be getting built are student high-rises. He thinks the University of Michigan is driving that growth, not the DDA, and he wants to see a redistribution of the DDA's wealth so more public improvements can be done in areas outside of the downtown." /nail-on-the-head
Vivienne Armentrout
Mon, Apr 15, 2013 : 4:10 p.m.
Speaking of the injection of "politics", is the Michael L. Henry whom you name as chair of the Arts Alliance also the same Mike Henry who is the chair of the Ann Arbor Democratic Party? http://annarbordems.org/ This statement would seem to identify the (political) camp Mr. Henry identifies with. The Arts Alliance http://a3arts.org/index.php?option=com_content&view=article&id=99:staff-and-advisory-board&catid=34&Itemid=94 board also includes members from SPARK, the Convention and Visitors Bureau, and a couple of architects. It would appear that there are a number of affiliations and mutual interests with the DDA there.
Ryan J. Stanton
Mon, Apr 15, 2013 : 5:47 p.m.
Yes, it's the same Mike Henry. And yes, the Arts Alliance seems to be a strong believer in the DDA.
noyfb
Mon, Apr 15, 2013 : 2:49 p.m.
This is obviously Self-Interest Group 1 versus Self-Interest Group 2. The Mayor wants to pick his people and his people want to stay on the inside. Kunselman wants to be the guy who picks the people because he thinks he's smarter than everybody else. The fact is we probably do need a change to the DDA but I don't trust Stephen Kunselman to have anything to do with it. It's all a joke.
Carole
Mon, Apr 15, 2013 : 2:03 p.m.
DDA needs to be disbanded, and all funding should go into the city's coffers. And, the city needs to step up to the plate and do their job with regards to the needs of the citizens of Ann Arbor. And, I surely would love to see audits on a regular basis to insure that funds are being spent accordingly.
Goober
Mon, Apr 15, 2013 : 3:02 p.m.
Even though I agree with you, I do not believe the mayor and most of city council will ever agree to disband the DDA. It really remains in the hands of the voters who keep placing these people in office. Until this changes, we 'get what we get'! Or, better yet - we get what the majority of AA voters wanted for the leadership of our city. As long as they remain in office supported by the majority - we are stuck!
Ryan J. Stanton
Mon, Apr 15, 2013 : 2:35 p.m.
Here's a link to the DDA's latest audit: http://www.annarbor.com/Ann_Arbor_DDA_audit_2011-12.pdf
cindy1
Mon, Apr 15, 2013 : 1:53 p.m.
For anyone who missed it, Steve Kunselman gives a clear explanation of the ordinance changes being voted on at tonight's meeting: http://lucyannlance.com/?p=33456 The article above ends with Greff's bold accusations of Kunselman as self-serving; the last paragraph states he's considering running for mayor next year. This is a perfectly clear example of what people call "slanted" journalism.
cindy1
Mon, Apr 15, 2013 : 8:13 p.m.
Stanton states: "this has been one of the biggest issues before the council this year" --excellent reason for objective reporting. It makes it so much easier for readers to clearly understand issues and form opinions. I believe the people commenting here (myself included of course) are not interested in Stanton's feelings or opinions, but in the quality of reporting in Ann Arbor's main news source.
Ryan J. Stanton
Mon, Apr 15, 2013 : 5:44 p.m.
If you think I'm biased against Stephen Kunselman, you're incorrect, but I suppose you're welcome to try to guess what my personal feelings are. And I guess we could sit and debate where you draw the line between a modest proposal and a major proposal, but the fact is this has been one of the biggest issues before the council this year, it has stirred up a communitywide debate lasting multiple months, spanning multiple public meetings, and now caused a letter-writing campaign to council.
Brad
Mon, Apr 15, 2013 : 3:52 p.m.
I appreciate that writers can't always avoid their own biases. That's what editorial oversight is for.
nancy
Mon, Apr 15, 2013 : 3:36 p.m.
The article is definitely slanted as it starts out by referring to the Modest changes as major changes to the DDA implicitly leading one to think the DDA funds will not be increasing. Balanced approach would be to state only that there are changes and then factually state them. Biased reporting does not support an informed process. The politics has at least two sides and can be reported as such. Issue of change -- those in power want to keep power and as usual put up a battle to fight change.
cindy1
Mon, Apr 15, 2013 : 2:45 p.m.
I agree with your almost all of your statements, Mr. Stanton. I also know that nuance plays a big part in journalism. How things are stated, the flow of an article, etc. have a big effect on readers' perceptions. My only point was to say that revealing Kunselman's possible plan to run for mayor directly after he's viciously berated and strongly accused of opportunism is an obvious "slant" journalistic tactic.
Ryan J. Stanton
Mon, Apr 15, 2013 : 2:32 p.m.
Not everybody is aware that Kunselman is considering running for mayor. It's entirely fair to point out, and hopefully it helps people understand Greff's statement. I also think we've done a good job of giving Kunselman room throughout our coverage to speak to why he decided to bring forward these changes and to respond to the many accusations from DDA board members, his peers on council and others in the community that his motives are political. I also provided that same link to the Lucy Ann Lance interview in the comments section of my last story.
Alan Goldsmith
Mon, Apr 15, 2013 : 1:48 p.m.
A blast from the past on Ms. Greff's political judgement: http://www.a2politico.com/2011/05/quislings-or-naifs-well-known-ann-arbor-dem-duo-defend-their-support-of-republican-rick-snyder/
Nicholas Urfe
Mon, Apr 15, 2013 : 1:43 p.m.
A few limits and controls may be placed on the non-accountible corporate welfare cabal that has demonstrated that they don't care what A2 residents want. And some say the ky is falling! Oh dear!
Ryan J. Stanton
Mon, Apr 15, 2013 : 1:35 p.m.
Some clarification finally on the discrepancy issue mention in the story. I just added this to the story: Tom Crawford, the city's chief financial officer, said on Monday he and the treasurer looked into it and the difference between the $2 million figure and the $3.2 million figure is due to the fact that the DDA used to be able to capture school taxes to pay for pre-1994 debt by the DDA. "It was essentially a pass-through for debt service and was not available for other DDA purposes," he said. "For analytical comparison purposes, this is excluded from the figures the city has been providing related to the DDA TIF refund discussions." In other words, the higher number is the actual tax capture, but the city is using lower numbers subtracting out the school taxes for comparison purposes. Beginning in fiscal year 2009-10, the DDA no longer has any pre-1994 bonds due and therefore does not collect any school millages. It's still not clear why the treasurer's numbers show the TIF reached $3.9 million in 2012 when the DDA's audit and other financial records show it was $3.7 million.
Steve Bean
Mon, Apr 15, 2013 : 1:30 p.m.
"Henry said the rush to impose new restrictions on the DDA seems ill-considered and comes across as punitive." That's because he clearly is misinterpreting (or misrepresenting) the amendments as imposing restrictions. The TIF capture amendment is a clarification. The term limits amendments would have no effect on the DDA's operations, only its board's composition. The representation amendment, likewise.
Steve Bean
Mon, Apr 15, 2013 : 1:55 p.m.
If it were just the word "limits", then that might be a matter of splitting hairs. It was the phrase, not the word, that I referenced, and I think it's more than splitting hairs. Consider this question: how would the amendments limit the DDA? They wouldn't. They would limit revenues, and they would limit the mayor's appointment parameters. They would in no way limit DDA operations or DDA board decision-making capacity.
Ryan J. Stanton
Mon, Apr 15, 2013 : 1:39 p.m.
I think we're splitting hairs here. The changes limit the DDA's revenue growth, limit the length of time board members can serve, limit who can serve without special approval, limit how TIF dollars can be spent, etc. I'm comfortable with calling these new limits. I also don't object to calling the TIF capture calculation part a clarification.
Steve Bean
Mon, Apr 15, 2013 : 1:34 p.m.
"Council Members Stephen Kunselman, D-3rd Ward, and Sumi Kailasapathy, D-1st Ward, are co-sponsoring changes that would place new limits on the DDA and slow its revenue growth, taking nearly $1 million in tax revenues away next year alone." Ryan, I think you've also mischaracterized the proposed amendments with the phrase "new limits on the DDA".
Veracity
Mon, Apr 15, 2013 : 12:32 p.m.
THE DDA'S IMPRUDENT SPENDING includes: $47 million for the library parking structure capable of supporting a 14-story luxury hotel/convention center even before Valiant Partners proposed hotel construction; $20 million in addition expense was incurred above the cost of a conventional parking structure. Now the DDA is paying $3.6 million in bond debt obligations yearly which is not covered by parking fees or TIF receipts, the major reason for annual budget deficits. $407,000 grant to Zingermans for its expansion which helped pay for LEED certification, signs, and a new sidewalk. The largesse was justified because Zingermans has been a good friend to Ann Arbor. Similar gifts are not planned for other Ann Arbor businesses. $9 million to build a parking structure for Village Green City Apartments at First and Washington that will offer 270 parking spaces. When complete, 144 spaces will be reserved for private use. The annual bond servicing cost will be about $600,000 which will not be covered by parking fees generated by the parking structure. $1.3 million loan from Republic Parking to pay for computerized gate equipment allowing the use of credit cards. The annual cost of this loan is $300,000 per year for five years. The computerized equipment has been criticized for malfunctioning by retaining cardholder's personal information and in some cases damaging credit cards. $54,000 annually to lease its office space privately after refusing free use of space in the new municipal building. $540,060 subsidy to the AATA which allows employees of downtown businesses to purchase annual go!pass bus passes for $10 thus saving about $750 in cost for daily use of buses. The DDA is able to decide on expenditures without any oversight or need for approval. Previous use of tax payer funds have been criticized as injudicious. The City Council resolution provides a first step at restraining the DDA's previous unfettered ability to spend tax payer monies.
Veracity
Thu, Apr 18, 2013 : 12:51 a.m.
Ryan - To answer your question regarding the source of the number "144" for parking spaces reserved for private use by residents of Village Green City Apartments, I quote below from the February 19th Ann Arbor Chronicle Article. And, by the way, the actual number of reserved private spaces is "145" instead of "144" which is conveniently similar to Village Green's total number of apartments. I apologize for my error. "The DDA is committed to covering payments on the roughly $9 million of bonds to support construction of the bottom two floors of the building – which will hold about 240 parking spaces. Of those, 95 will be available for public use. The remainder of the spaces will be used by residents of the 146-unit project, when construction is completed." http://annarborchronicle.com/2013/02/19/next-financial-step-for-city-apartments-parking/
Nicholas Urfe
Mon, Apr 15, 2013 : 1:46 p.m.
Great post.
Stephen Lange Ranzini
Mon, Apr 15, 2013 : 1:07 p.m.
The Republic loan is apparently at 6% interest and by my calculations, the extra interest alone above the current market rate that the City of Ann Arbor could borrow at is $250,000 over the life of the loan. Why does this make sense? I'd like to know.
Ryan J. Stanton
Mon, Apr 15, 2013 : 1:03 p.m.
The City Council agreed to authorize up to $9 million in general obligation bonds to help pay for the parking structure being built at First and Washington as part of a deal the city worked out with Village Green that included the developer paying more than $3 million for the property. Of the 244 spaces planned, about 72 are expected to be held for building tenants, leaving about 172 spaces available to the general public. Where did you get the figure of 144 going to the building tenants?
Veracity
Mon, Apr 15, 2013 : 11:47 a.m.
Rehmann Robson, the Jackson, Michigan auditors, stated in its report that the financial numbers provided by the DDA for 2012 were accurate. Rehmann Robson refused to comment on how well the DDA used its money because insufficient information was provided. Evaluation of the financial numbers for the DDA's fiscal years 2011, 2012, and 2013 which are found in PDF documents at the DDA's website show the following consistent DEFICIT budgets: Fiscal 2010/2011: Total Income ......................................... $20,023,302 Total Expenditures ................................. $25,779,945 Excess of Revenues Over Expenses ........ ($5,756,643) Estimated Beginning Fund Balance ......... $8,881,861 Estimated Budgeted Ending Fund Bal....... $3,125,218 Fiscal 2011/2012: Total Income .......................................... $20,118,601 Total Expenditures .................................. $22,293,891 Excess of Revenues Over Expenses .......... ($2,175,290) Estimated Beginning Fund Balance ........... $6,090,611 (1) $3,125,218 (2) Estimated Budgeted Ending Fund Bal......... $3,915,322 (1) $949,928 (2) (1) As listed in DDA budget statement without comment on $2,965,393 increase in beginning fund balance over previous ending fund balance; (2) Calculated based on previous year ending fund balance. Fiscal 2012/2013 Total Income .......................................... $22,097,956 Total Expenditures .................................. $24,101,692 Excess of Revenues Over Expenses .......... ($2,175,290) Estimated Beginning Fund Balance ........... ?????????? (3) $949,928 (4) Estimated Budgeted Ending Fund Bal......... ?????????? (3) ($1,225,336)(4) ***** INSOLVENCY **** (3) No calculationts provided by DDA. (4) Calculated from figures provided.
1bit
Mon, Apr 15, 2013 : 7:36 p.m.
"Are you suggesting saving up money, spending some of it, then saving up money again is bad financial practice? Because if I buy a home someday, this is probably how I'll do it." @Ryan: The point is that not all debt is the same. Taking on some debt can be a good idea. Too much debt can cause huge problems. If the investment is a poor one, then any debt is a bad idea. And just because our elected leaders misspend resources doesn't mean we shouldn't call them out on it because the process was democratic (see Detroit).
Ryan J. Stanton
Mon, Apr 15, 2013 : 1:53 p.m.
As I understand it, there was a good debate about the parking garage project back before it was approved in 2009, opportunity for public comment, and the overall discussions led to a compromise where the project was scaled back before it received final approval from the City Council, which sliced 100 spaces and about $6 million from the plan. http://www.mlive.com/news/ann-arbor/index.ssf/2009/02/ann_arbor_city_council_oks_677.html Ann Arbor voters elected the council members who approved the project the DDA followed through on and had built. Luckily we live in a democracy where we can vote people in or out of office if we don't like the decisions they make, and we've seen that happen. It's fair to point out the City Council doesn't always vote directly on every DDA project, but it does vote to adopt the DDA's budget as part of the overall city budget every year.
mtlaurel
Mon, Apr 15, 2013 : 1:06 p.m.
Mr Stanton:whose money is the DDA saving up however? And wouldn't you have a discussion with your family re the how/when/why to spend the money you saved up? ....I really doubt you would take your savings and purchase a mortgage if your spouse disagreed about the amount/the location/the scope of your plans for the home.....you would have a discussion. what if your wife said-no we need a modest home because our child wants to attend college and then go to grad school and wants help......you might see the merit of changing your goals when you factor various forces in your life.....the DDA doesn't function like that now does it?
Veracity
Mon, Apr 15, 2013 : 12:38 p.m.
Ryan, The DDA's 10 year plan is just that: a ten year plan. Assumptions for the DDA's expectations each year is not clearly defined. No one should be surprised if actual future performance differs from the projected numbers. Meanwhile the DEFICIT budgets for fiscal year 2011, 2012 and 2013 involve real numbers and not projections.
Ryan J. Stanton
Mon, Apr 15, 2013 : 12:20 p.m.
The DDA planned to dip into its savings to help pay for the new underground parking garage off Fifth Avenue, which is why some of the budgets have looked the way they've looked. The DDA has a 10-year plan that shows it expects to rebuild its fund balances. http://www.annarbor.com/DDA_10-year_plan_2013.pdf Are you suggesting saving up money, spending some of it, then saving up money again is bad financial practice? Because if I buy a home someday, this is probably how I'll do it.
Jack Eaton
Mon, Apr 15, 2013 : 11:42 a.m.
The article says: The changes Kunselman and Kailasapathy are supporting would force the DDA to refund roughly $931,000 in the next fiscal year..." In fact, the resolution would merely change the calculation so the DDA does not capture that money. Let's remember that the DDA has seen its annual revenues increase consistently while other public bodies have struggled to provide essential services. The DDA has never had to exercise any level of fiscal restrain. The expected nearly $1 million per year increase in TIF revenues (if the resolution fails) is the result of the A2D2 zoning changes, not anything that the DDA has done. The essential question is: What should we spend this new, nearly $1 million per year on? I think we should allow that money to go to the County, City, AATA, WCC and AADL. Even without that extra $1 million, the DDA TIF revenues will be greater next year than this year and will continue to grow from year to year thereafter. At the same time, if this resolution passes the other public bodies would see some relief in their fiscal problems. The true community interests in this debate extend beyond those of the narrow downtown-centric advocates of the DDA. The community interests of taxpayers also involves the City, County, AATA, WCC, and AADL.
Jack Eaton
Mon, Apr 15, 2013 : 11:52 a.m.
Additionally, the changes to the DDA's governance (term limits and restrictions on dual service) would help restore the DDA's public trust. The DDA Board has become an entrenched group that does not serve the whole community. The recent Connecting William Street fiasco is a great example of the DDA having an agenda that is at odds with the taxpayers. We need to bring fresh voices into that entity to broaden its views. The Kunselman/Kailasapathy resolution would also ban elected officials from the public bodies whose tax revenues are diverted to the DDA from serving on the DDA Board absent permission of the other public bodies. That simple requirement would protect al of us from potential conflicts of interest and protect the public bodies from allowing other entities having too much influence on the DDA. Two 4-yea terms would allow both continuity and turnover. That seems reasonable.
Brad
Mon, Apr 15, 2013 : 11:38 a.m.
""Of course, any improvements made downtown are good for everyone" We know that's an accepted fact In that "downtown centric" perspective held by far too many of our elected and unelected officials (and certain publications), but are they REALLY? Sure, it sounds nice and happy and fluffy, but is it TRUE?
1bit
Mon, Apr 15, 2013 : 11:30 a.m.
Ryan, If this ordinance passes, can the DDA just raise parking rates to make up the difference?
Ryan J. Stanton
Mon, Apr 15, 2013 : 11:59 a.m.
DDA officials have said they aren't planning to raise parking rates for the foreseeable future, but I suppose theoretically that's a possibility. I wouldn't expect to see a big parking rate increase, though.
SonnyDog09
Mon, Apr 15, 2013 : 11:25 a.m.
"Of course, any improvements made downtown are good for everyone ..." I live in a2, but not anywhere near downtown. I haven't been downtown in years. Just how are "any improvements made downtown" good for me? Is this the same logic that says that we need a strong and vibrant Detroit for the region to survive?
Dave Koziol
Mon, Apr 15, 2013 : 3:24 p.m.
Downtowns have higher density. Higher density makes services (Police, Fire, Water, Electrical, Cable, Phone) more cost efficient per resident. This cost efficiency benefit people who choose to live in less dense areas as their higher costs are subsidized by the downtown's density. Downtowns generate higher property taxes. Those property taxes can and often are spent around the town. Often those taxes come from business who don't get to vote on how their tax dollars are spent. Downtowns create a "place" where many like to go. This is a quality of life benefit that you may not value, but many others do. I know of many people who live in or near Ann Arbor, or who choose to locate their business in downtown because of Ann Arbor's downtown.
foobar417
Mon, Apr 15, 2013 : 3:20 p.m.
Because they are too busy complaining about everything on internet message boards. So many places to grumble, so little time. :-)
Ryan J. Stanton
Mon, Apr 15, 2013 : 2:20 p.m.
My comments are completely unrelated to any thoughts about the DDA. I'm just trying to figure out how someone could live in a cool city with a thriving downtown and choose not to take part in all that it has to offer.
SonnyDog09
Mon, Apr 15, 2013 : 2:08 p.m.
I'm glad that you like doing stuff downtown, Ryan. Please explain how that is good for "everyone"? Just giving me a list of stuff that you like doing downtown doesn't explain how "improvements made downtown are good for everyone."
Nicholas Urfe
Mon, Apr 15, 2013 : 1:48 p.m.
Ryan makes excellent points. But I don't attribute the activities I do downtown to the DDA. Downtown could be much better with a more regulated DDA. They have made some terrible decisions which will take years to pay off.
Ryan J. Stanton
Mon, Apr 15, 2013 : 12:53 p.m.
You can park for free on the street downtown after 6 p.m. Monday-Saturday and anytime on Sundays in the garages or on the street. I can think of a lot of good reasons to go downtown at those times. Live music at the Ark. Movies and performances at the Michigan Theater. A wide variety of free programs at the library and on campus. Great dining options you can't find elsewhere in Ann Arbor. The new monthly variety show at Live. Laughs at the comedy club. All of the festivals and street parties that take place downtown, like FestiFools last Sunday. Or you could even go to a City Council meeting at 7 p.m. and air your grievances.
SonnyDog09
Mon, Apr 15, 2013 : 12:30 p.m.
What keeps me from downtown? The parking. The traffic. The prices. The people. Other than that ...
Ryan J. Stanton
Mon, Apr 15, 2013 : 12:25 p.m.
What's keeping you away from downtown? I feel like I'd be missing out on so many cultural and civic opportunities if I never went downtown.
Brad
Mon, Apr 15, 2013 : 11:39 a.m.
That's the party line, @Sonny. Ann Arbor revolves around the downtown.
Tom Joad
Mon, Apr 15, 2013 : 11:22 a.m.
If the DDA were serious about developing a vibrant and eminently liveable and enjoyable downtown it would curtail the hegemony of the automobile. Completely remove curbside parking on certain streets and funnel parking into any of the larger parking structures that have been built of late. Certain streets could be designated thoroughfares with shared bikes and cars that could more efficiently move traffic across town, but particularly focusing on bicycles with well demarcated lanes and perhaps even physical barriers between cars and bicycles. Even certain blocks could be totally closed off to vehicular traffic and in its place a pedestrian mall built with bike lanes. As it is now the success of downtown Ann Arbor is commensurate with increased vehicular traffic to the point that it has become congested and downright dangerous to cross many streets as drivers jockey for position, impatient with pedestrians and making a walk downtown less than enjoyable. DDA's binomial mission of encouraging growth and business development along with managing parking is inconsistent with the ultimate goal of making the downtown more bike and people friendly. Quite simply a small geographical area cannot serve all the traffic. Reckless and unrestrained growth in the downtown area has exceeded its carrying capacity and the tyranny of the automobile still reigns supreme. Who says every street in Ann Arbor should be given over to automotive traffic and parallel parking? Obviously the business interest is narrow minded and would fight tooth and nail to take away their precious parking in front of their business but parallel parking slows traffic, adds to congestion and makes riding around on bicycles more dangerous.
Dave Koziol
Mon, Apr 15, 2013 : 3:16 p.m.
Curbside parking is important to walkability. For a good reference, I strongly recommend reading Walkable City: How Downtown Can Save America, One Step at a Time by Jeff Speck. I have a copy of the book I'm happy to loan out, when the current person reading it returns it. In the book, Mr Speck argues that curbside parking provides a buffer for pedestrians and also serves to slow traffic down. Both of these items are vital in my opinion to a vibrant and eminently livable and enjoyable downtown. He also has a good discussion of closing off streets to vehicular traffic, and the lack of success that has had around the nation and the world.
lefty48197
Mon, Apr 15, 2013 : 11:08 a.m.
If the chamber of commerce supports it , then I oppose it.
Brad
Mon, Apr 15, 2013 : 11:55 a.m.
The chamber supports skimming of tax money to its benefit? Shocking!
Alan Goldsmith
Mon, Apr 15, 2013 : 10:54 a.m.
"Sorry, but corporate welfare isn't anywhere on the list of priorities and those priorities ought to be set by the *city council* and paid from the general fund, not the Mayor appointed and unelected DDA board." Bingo!
1bit
Mon, Apr 15, 2013 : 10:52 a.m.
When 32% of your budget goes to servicing debt, you shouldn't really wonder why others are questioning your management of taxpayer dollars. The DDA was very capable of accomplishing its mission with less money previously, so why are they so incapable now?
1bit
Mon, Apr 15, 2013 : 5:30 p.m.
@foobar: You're halfway there. The structure was unnecessary, overpriced and designed for a pet project (overlying building) that may never occur. And, nevertheless, if the debt service is 32% of your budget than you overspent.
foobar417
Mon, Apr 15, 2013 : 3:19 p.m.
That makes no sense. Public entities bond construction projects all the time. They invested in building a parking structure and paid for it with anticipated future earnings from said parking structure.
RUKiddingMe
Mon, Apr 15, 2013 : 10:43 a.m.
I don't know all the details and complexities of what the DDA does and whether it's good for the city. I DO know that in a recent council meeting I watched, a woman (I believe a member of the DDA) was addressing questions about what the DDA did and their benefit to the city. She had very little to say other than "we don't just do parking." She had several opportunities to elaborate, and I just did not hear any real concrete provable examples of how the DDA used money wisely and at great benefit to the city. I'm assumig she had some time to prepare for this session too, since the issue has been in a2.com for a while. In terms of projects specifically mentioned in this article, the "solar demonstration" was a complete waste of time and money, and I recall a farmers market project or 2 that used up hundreds of thousands of dollars in planning and then were scrapped; if the DDA was in charge of those, then they didn't do good by the city. The affordable housing projects I continuously hear bad things about (in terms of money VERY poorly spent, sometimes completely lost, and in vast quantities. Was the DDA responsible for the Y lot?). The underground parking garage was an insanely poorly handled project, and it seems like the DDA has gotten themselves a large enough debt that our taxes will be sucked into it for quite some time. Everything I've seen, including the DDA defending itself, just looks like this is yet another way that our property tax dollars can be lost in a confusing, seething mass of the bad ideas of a small group of people looking for ways to spend huge amounts of money. I don't necessarily think the city will do better with the money; Council and the mayor have shown very poor judgement here as well. But at least reining in the DDA (and I wish this was actually about disbanding it entirely) reduces the number of places we all have to look for who's doing criminally negligent (or maybe just criminal) things with our money.
RUKiddingMe
Mon, Apr 15, 2013 : 11:49 p.m.
Okay, I read it, and it really doesn't seem that great. Half the stuff in there seemed like a waste, and the other half seemed like something the city doesn't need a totally separate organization to do. I see in there that Avalon got some grants. That's wonderful.
RUKiddingMe
Mon, Apr 15, 2013 : 4:20 p.m.
If I recall correctly, the bidding ont hat underground garage was shady at BEST. the handling of that project (was it 24 months overdue? 18?) was negligent at BEST. The "opening" of it was a sham. I don't have direct evidence, like quotes or footage of anyone accepting bribes, Ryan, but misleading the public or other officials about the necessity/nature of projects or the procerement/expenditure of funds is illegal. And I'm just allowing for some of the things that have happened to involve at LEAST deception. Thanks for the link to the report, I'll have a look at it. Maybe I'm wrong and the DDA is awesome and wellmanaged and frugal and has no conflicts of interest. Maybe the underground garage was a fluke and eveyrhting else they do is on time, underbudget, and has big paybacks for the city. I would love to be wrong on this one. Not to look a gift horse in the mouth, but is there any kind of "what we've done and here's the proof" documentation for SPARK avaialable?
Ryan J. Stanton
Mon, Apr 15, 2013 : 12:39 p.m.
I'm not sure which meeting you watched, but the DDA has provided a lot of data over the last two months about what it does. It even released this seven-page report on the history and purpose of the DDA, with a detailed look at projects it has financed over the years. http://www.annarbor.com/DDA_info_2013.pdf Can you point me to which projects or specific uses of the DDA's money you think are criminal? I've been reporting on the DDA and going to its meetings for four years and, while there are projects from time to time where you could debate the merits of spending that money, I haven't seen anything that rises to the level of a crime.
Barzoom
Mon, Apr 15, 2013 : 10:38 a.m.
The DDA should be disbanded. We don't need an unelected shadow government.
Alan Goldsmith
Mon, Apr 15, 2013 : 10:25 a.m.
"I have to say that I have seen a lot of ugly and petty politics (along with a lot of careful consideration and political courage) over the past decade and a half that I have followed council, but Councilman Kunselman's most recent move to curry political favor by attacking the DDA may be the worst yet," she wrote. Ms. Greff apparently has short term memory loss, being a major contributor to Republican Governor Rick Snyder's campaign. I guess her definition of "ugly and petty politics" is a little different than the rest of us. And the Ypsilanti resident should let Ann Arbor decide how it wants to dole out local tax dollars and if we want term limits and direct her attention to her own failed city.
Stephen Lange Ranzini
Mon, Apr 15, 2013 : 10:20 a.m.
The DDA's current priorities as expressed in the last article on this topic, adding elevators and retail to the Williams Street Garage, paying for a sewer improvement to help develop the Y Lot into a tall building, and new street lights on S. Main St. don't even rate a last placed "10" on the list of top 10 priorities I would suggest we ought to be focused on which start with providing basic public services: "#1" fire and emergency medical services that meet national standards, "#2" a police car in front of your door in two minutes to help in an emergency situation, and "#3" roads that are in good repair. Sorry, but corporate welfare isn't anywhere on the list of priorities and those priorities ought to be set by the *city council* and paid from the general fund, not the Mayor appointed and unelected DDA board. The Mayor has rallied some allies to fight for increased funding for his DDA slushy fund to fill his various city "buckets", not for the best interests of the citizens!
Usual Suspect
Thu, Apr 18, 2013 : 12:54 p.m.
That's "not what". Seems like you didn't need tuition.
ordmad
Tue, Apr 16, 2013 : 4:27 a.m.
Please stop with that 2 minute pandering until you point to some national standard or other communities of our size that enem come close. And no what some prior mayor talked about isn't any of these things.
Goober
Mon, Apr 15, 2013 : 11:20 a.m.
Seeing that he has the majority of AA voters behind him, I'll bet that the mayor wins this battle.
DennisP
Mon, Apr 15, 2013 : 11:14 a.m.
Exactly. TIF is intended to redirect tax dollars collected within the DDA boundaries for use in enhancing and improving that area. It's fine when the City has money to spare to ensure that downtown businesses get something back specifically for their business neighborhood. But, the City doesn't have the money to provide the fundamental services we all expect to the downtown or the rest of the city. As has been said, the only thing with an eternal life is another governmental bureaucracy. I won't say the DDA has outlived its utility. I will say its utility is far more narrow in these times. If the City becomes flush with cash, police and fire are in good order, roads paved, etc, then DDA funding can be reconsidered. Finally, no DDA appointment should be unending. Either establish term limits for DDA or subject them to a popular vote.