Signs and Portents for the Library Lot

In which there is new old news about the conference center proposal.

We began reporting about straws in the wind for a conference center on the Library Lot nearly 18 months ago.  In that first post,   we explained that discussions were going on as early as April 2008 among opinion leaders about the desirability of a downtown conference center.  Then council was given a preview of an unsolicited proposal almost two years ago, in December 2008.  An anonymous source passed along a copy of what we dubbed the Secret Plan, which we posted online later.  The plan had been submitted by a group called Valiant Partners.  Later, we were able to cite some emails that revealed discussions going on at the staff level long before Council saw any detail.  Finally, an RFP was issued (details on the city website) and an advisory committee was formed.  The rest, as we say, is history; consult  the summary page for posts with a blow-by-blow description of the process.

But as the discussion – and opposition – heated up, the public process came to an abrupt halt, while the city considered applications from prospective consultants. As we reported, the last RFP advisory committee meeting for the project was on February 23.  Meanwhile, the DDA board voted to pay for hiring a consultant to help with the difficult heavy lifting (which the appointed committee was evidently considered to be unable to do).   That second RFP was issued on January 5, 2010, but it was difficult to discover what was happening. The chair of the advisory committee, Councilmember Rapundalo, answered (March 18, 2010)  a query from a constituent with this explanation:

“The Library Lot is somewhat on the back burner during the intense budget processes, and while we get the consultant up to speed and respondents seek/provide more information. A contract has been drafted for the consultant and we will kick that effort off with more gusto in early April. There is no planned meeting on the horizon.”

This message seemed to indicate that back-room discussions were going on with the consultant, as had been indicated by city administrator Fraser at the February 23 meeting.  But at the time, that consultant’s identity was unknown.  This message also seemed to indicate that negotiations were going on without public scrutiny.  After CM Sabra Briere kindly made an inquiry about this, the attached message from CM Rapundalo offered a clarification of sorts.  In it, he says, “My commitment is to insure that the process remains transparent throughout. The silence on the matter truly reflects nothing more than a break in the action brought about by various circumstances. I think that we now recognize that the process will obviously take longer than a March-April timeframe – and the bottom line for me is to make sure that the due diligence is conducted properly and thoroughly. I want the final recommendation to be based on nothing more than good process so that people don’t point at us and suggest that it was somehow skewed, biased, rigged, etc. in any way other than in the best interests for the City.”

Rapundalo, who has been the primary advocate for a conference center on the Council (though fellow CM and advisory committee member Margie Teall has his back), sounded a similar message in an April article in the Ann Arbor Observer , where he is quoted as saying, “It’s an open process,…and I’m committed to due diligence.”

But despite this commitment to “transparency” , it was extremely difficult for months to learn even the identity of the consultant or the status of that piece of the puzzle.  We were reduced to searching for signs and portents.  In June 2010, CM Rapundalo was quoted in AnnArbor.com as saying that consideration of the two conference center proposals was active, but was waiting until a consultant who would assist in evaluating them was hired.  Mayor John Hieftje, in the same article, had this to say about the RFP Advisory Committee:  “And I just know they haven’t met for a while, and that’s fine. It was put out there to see if somebody wanted to build something on top of it, but there’s plenty of time to talk about that.”

As we reported back in February, the move seemed to be toward consolidating support from “stakeholders” : “Some of the suggested guests or information sources were the Convention and Visitors’ Bureau (CVB), SPARK, and Josie Parker, the executive director of the Ann Arbor District Library.  (The UM was also suggested and firmly dismissed.)”    These were all intended to be supporters of a conference center, but as we mentioned at that time, the DDA’s executive director Susan Pollay cautioned that the CVB is primarily supported by the hotel industry, who might not support the building of a new hotel.  Indeed,  the Washtenaw County Hotel and Motel Association sent a letter in March opposing city subsidy of a new hotel.  (It makes many of the same economic arguments that we made in a March 1 post).  As for business interests, the Ann Arbor Area Chamber of Commerce published a statement on March 23, 2010,  in which they offered at the very best a lukewarm endorsement of the idea of a conference center.   Rather, they suggested that planning for that entire area of town should be engaged and expressed strong doubt that the city could pull off a good result.

Just to make things more confusing, a May story quoted developer Ron Jona as planning to put forth a proposal for a hotel, conference center, and mixed-use development – on the Kline’s lot.

But as of July 2010, CM Rapundalo was still pressing the “stakeholder” idea.   Prodded by perennial gadfly Alan Haber, Rapundalo had this to say, as reported by AnnArbor.com:

“Rapundalo said the city is close to signing an agreement with a consultant to help evaluate the feasibility of the two hotel and conference center proposals, which were submitted by Valiant Partners and Acquest Realty Advisors.

After the consultant is hired, he said, a series of meetings will be held with stakeholder groups like the Ann Arbor Area Convention and Visitors Bureau, Ann Arbor SPARK and the Ann Arbor District Library. He said the city may even have the consultant sit down with both Valiant and Acquest to discuss their proposals.

Thanks to reporting by the Ann Arbor Chronicle, we finally learned that the chosen consultant is The Roxbury Group, a real estate development firm. Now,  Roxbury has issued its report, apparently presented at a meeting (not announced) of the RFP advisory committee on November 23,  2010.

And now: (cue the trumpets) – the result is – they are recommending the Valiant proposal!  That’s right – the makers of the Secret Plan, who had the inside track since 2008.

A detailed analysis of their report is to follow, but its weight may be inferred from this sentence in the introduction:

“…it is generallyassumed that the overall concepts included in the uses for the Library Lot contained in each proposal are valid and supportable from a market and demand standpoint.”

Explore posts in the same categories: Business, civic finance

5 Comments on “Signs and Portents for the Library Lot”

  1. Patricia Lesko Says:

    Vivienne this is a very nice piece that gives a lot of great detail concerning the back story. It’s this back story that’s important because, you note, the idea that the Valiant proposal was created or even judged transparently is difficult to believe give the head start the group was given by DDA staff, Hieftje, Council members, etc…

  2. varmentrout Says:

    Thanks – I always hesitate to get into long histories but it seemed that this was out of the public eye so long that the recap was needed.

  3. Tom Whitaker Says:

    I thought the whole purpose of bringing in an outside consultant was to help the committee determine whether or not the proposals were “supportable from a market and demand standpoint.” Unfortunately it appears this consultant decided simply to take the proposers’ and other proponents’ word for it.

    Both proposers expect a significant public contribution to their for-profit ventures. In other words, they want Ann Arbor taxpayers to be their financial partners.

    If someone came to me with a real estate investment proposal, expecting me to invest my cash and my credit, my first question would be, “Is there even a market for this thing?”

    In this case the answer is, “No. There is not.” Apparently that’s not the answer anyone involved wants to hear, so they aren’t even asking the question.

  4. Leslie Morris Says:

    Thank you, Vivienne, for this recap. I marvel at how you can keep your temper to recount this tawdry story so calmly.

    I see that financing by a city-guaranteed bond has been dropped; it seems the developers will seek their own financing.

    But I also see that the city is to inherit the conference center, and that this is listed as a benefit to the city. The reason, of course, is that conference centers require an operating subsidy, and the hotel developers don’t want to be stuck with this obligation.

    We citizens (not Stake Holders) don’t want to be stuck with it, either.

    If this private project is to be a financial benefit to us taxpayers, let the hotel developers run their own conference center, and pay us a fair price for the land (that is, the air rights over our underground parking structure).

    • varmentrout Says:

      Thanks, Leslie. I just reread the consultant’s explanation of how Valiant would change its financial proposal to assume risk, but I’d like to see Valiant’s own presentation of that. Among other things, Valiant seems to be counting the taxes generated by residential units. So will the DDA surrender its TIF rights? The finances are obviously key to any feasibility of the project, but the consultant accepts Valiant’s estimate of the market demand.


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