DDA playing hardball with city of Ann Arbor in parking agreement negotiations
Ann Arbor City Council Member Christopher Taylor says negotiations between the city and the Downtown Development Authority have been "frank and fruitful."
"There is some progress," Taylor said. "But also there are some points of contention that we'll continue to have conversations about."
Taylor, D-3rd Ward, addressed his colleagues Monday night and asked for another postponement of a resolution agreeing to a so-called parcel-by-parcel plan — one of two areas of mutual interest being discussed by the city and the DDA.
Taylor and Council Member Marcia Higgins, D-4th Ward, talk prior to the start of Monday's meeting.
Ryan J. Stanton | AnnArbor.com
The resolution, which was postponed once before in January, would authorize the DDA to develop an implementation plan to redevelop downtown parcels owned by the city. It also outlines a new city request-for-proposals process involving the DDA.
The four-week postponement comes so the city's Mutually Beneficial Committee — which includes Taylor and Council Members Margie Teall and Carsten Hohnke — can examine the DDA's latest request for a more formal agreement on the parcel-by-parcel plan.
"The DDA Mutually Beneficial Committee proposed that the parcel-by-parcel plan be subject to a contract between the city and the DDA," Taylor said. "This was a novel proposal — a proposal which had not been previously brought to the city's Mutually Beneficial Committee. And so that's, I think, one reason why it's suitable for postponement."
After nearly a year of talks, DDA and city officials also have yet to reach a deal on a new agreement spelling out each party's role in management of the downtown parking system.
That was apparent last week when the DDA passed a new two-year budget absent a sizable transfer of parking revenues to the city. DDA officials say they'll amend the budget to include those payments if and when a new parking agreement is agreed upon.
Records show the city received about $2.9 million in payments from the DDA last fiscal year and nearly $3 million is budgeted for the current year. That includes a flat $2 million transfer of parking revenues, as well as other contractual payments.
The DDA's budget shows most of that money going away July 1. But the DDA is proposing a deal where the city could receive as much as $2.26 million — or 14 percent of annual parking revenues — if the city agrees to the DDA's parking agreement terms.
The city is pushing for a 10-year agreement where, in the first two years, the city would be paid 16 percent of parking revenues. In the last eight years, the city would be paid 17.5 percent. But the DDA proposes starting out at 14 percent, and moving up to 15 percent.
"Those two figures have been relatively rigid for some time," Taylor said. "That is to say, the city has been continuing to request 16-16-17.5 and the DDA has continued to offer 14-14-15. And that's the way it has been for some time, and that is ongoing."
Taylor pointed out that would mean a loss of more than $700,000 from what the city has been used to getting from the DDA in recent years.
He said the city already expected to see its payments from the DDA drop by about $350,000 for the next fiscal year. He told City Administrator Roger Fraser Monday night it might be wise to take into account the possibility of losing another $350,000.
The city has gotten used to inflated payments from the DDA in recent years. Under the last parking agreement negotiated between the two sides, the DDA was expected to transfer $1 million a year to the city over a 10-year period ending in 2015.
The agreement allowed the city to opt to take a pre-payment of an extra $1 million per year at its discretion. The city chose to do that for five years straight and, by last year, had depleted the entire $10 million worth of the contract five years early. And then city officials wanted the $2 million payments they were used to getting from the DDA to keep coming.
Taylor acknowledged his frustrations that the city and the DDA have yet to come to terms after nearly a year of talks. A deal was expected to be reached by the end of last year.
"I had certainly hoped that this would have been done much earlier," Taylor said. "I still believe we will reach a satisfactory accommodation on all fronts. I continue to believe that members of the DDA with whom we're negotiating — as well as the others — are approaching the issues in good faith, and we'll come to a place that will be to the benefit of us all."
Council Member Marcia Higgins, D-4th Ward, said she still has concerns about the parcel-by-parcel resolution that she wants to see addressed.
Higgins and other council members expressed concerns in January with a provision in the resolution that would put the city on the hook for costs incurred by the DDA if it goes through an RFP process and the City Council decides not to approve a project.
"I hope that when it comes back again that some of those discussions are taken into consideration and we see a different document in front of us," Higgins said.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529.
Comments
Lifelong A2
Thu, Mar 10, 2011 : 1:54 a.m.
The comments calling for the end to the DDA are a bit misguided. The DDA captures tax revenue from many other entities; the City would lose the ability to invest those dollars in the downtown if the DDA were abolished. That being said, the DDA does *not* need to be in the business of parking management. They should simply give the parking system back to the City (which owns the parking garages and meters). The fights will end, the City can plan its budget, and the DDA can focus its energy on downtown development.
snapshot
Tue, Mar 8, 2011 : 9:55 p.m.
Sandi Smith serves on the DDA and City council. How's that for a conflict of interest. Leah Gunn chairs the DDA and is a County commissioner. Not a scenario that will guaranty objectivity in governance. Why does the DDA exist? They use our tax dollars, collect our city parking fees, and use the money the way they see fit, without any electorate influence, and they think this is appropriate? They even flout the fact they will not be answerable to the electorate in additional power grabs. What is wrong with the citizens of Ann Arbor? Are you sheep willing to be led to slaughter? Are you so economically secure that you could care less about accountability in governance? I'm not a genius but I do know that the fox guarding the henhouse isn't a good idea unless you're the fox.
Edward R Murrow's Ghost
Tue, Mar 8, 2011 : 9:46 p.m.
Time for this "tax capturing" authority, with its unelected members who are responsible to no one for the manner in which they spend our tax dollars, to go the way of the Dodo bird. Good Night and Good Luck
jcj
Wed, Mar 9, 2011 : 12:23 a.m.
I will try not to choke on these words. But I also agree with ERMG on this one.
snapshot
Tue, Mar 8, 2011 : 9:56 p.m.
For once, I agree with the Ghost.
Tom Wieder
Tue, Mar 8, 2011 : 6:22 p.m.
There's a theme in the comments, one that I completely agree with. It is long past time to reconsider the role of, and even the need for a DDA. DDAs were not designed to be a permanent fixture of local government, but rather to deal with seriously struggling downtowns. I don't think that applies to A2 anymore. I am a big supporter, and user, of Ann Arbor's downtown, and I think it's good to have a body, of some sort, that focuses on the health and development of the area. What troubles me is the continued siphoning off of tax revenues, both the city's and the other taxing authorities', into a dedicated use that has never been approved by voters and is somewhat insulated from the political process. A strong downtown is an important priority, but is it more important, every year, than other uses to which these tax dollars might be put? I don't buy the theory that all of the revenue the DDA absorbs is simply additional revenue generated as a result of its projects, so that it's not "taking" anything from other city uses. The idea that a body created by the city for specified and limited purpose is playing "hardball" with the city is a bit absurd.
jcj
Tue, Mar 8, 2011 : 1:54 p.m.
Why doesn't the city hand over everything to the DDA and then we won't even have to bother to vote for city council members. The DDA could just appoint members they approve of!
Olive
Tue, Mar 8, 2011 : 6:58 p.m.
I think that's the only way Newcombe Clark would ever get on city council.
leaguebus
Tue, Mar 8, 2011 : 3:33 p.m.
Mayor for life, Lowenstein. Sounds good, those pesky elections are expensive.
leaguebus
Tue, Mar 8, 2011 : 1:51 p.m.
The elected Council needs to get the DDA to realize that they exist to do councils bidding, not the other way around.
jcj
Tue, Mar 8, 2011 : 2:11 p.m.
My thoughts exactly!
bob
Tue, Mar 8, 2011 : 1:09 p.m.
Should the revenue from parking be used to maintain the parking facilities & lots?
5c0++ H4d13y
Tue, Mar 8, 2011 : 12:48 p.m.
Wasn't Hohnke the one that said the land that the city has no use for should be deed restricted and sold. Do that and this problem largely goes away. But then politically directed land development goes away too. Which is a good thing.
Soothslayer
Tue, Mar 8, 2011 : 12:44 p.m.
City: Just wholly absorb the DDA within your municipality and get it over with. In the end it will just be you & UM jockying for services and space so better sooner than later to get prepared.
AAresident
Tue, Mar 8, 2011 : 12:15 p.m.
This is a good time to reevaluate the role of the DDA. The city hasn't been very effective at development and the DDA might be better at it. But let's look at what the DDA has done before we decide to give them more control. DDA Chairwoman Joan Lowenstein wants the DDA to make decisions instead of Council so that unpopular decisions are not subject to voter approval. Ms. Lowenstein said to Council members on Nov 17, 2010: "All of you here have to run for office every couple of years. There is no reason why any of you should have to run for office on the question of whether parking is $1.50 an hour or $1.75 an hour. You are elected to make broad policy decisions and have a broad policy agenda. And what we're suggesting here is that we take over what are some of the managerial parts of this whole process so that we can, in effect, shield you from having to do that." That's terrible leadership. And when the DDA was promoting underground parking, they sold the idea to the public by saying that payments on the approximately $50 million bond for the construction would be made from parking revenues. Before the first payment was made, DDA voted instead to use our taxes to pay off the bonds. Also, DDA's decision to build underground parking lacked a robust public process. The push to build the parking and a convention center and hotel above it followed the Lowenstein principle of making decisions without public input. DDA's attitude seems to be: "We need to decide what's good for the public." Taxes must be spent with care and respect. Why give more power to a separate branch of government like the DDA whose chairperson is proud of the fact that they are less accountable to voters than the city council? The DDA was put in place in 1982 when the downtown was struggling. Now that conditions downtown have improved, let's reevaluate the DDA's role and its responsibilities to our community.