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Core Spaces and The Soul of Ann Arbor

April 16, 2017

It seems to have gone on forever.  But really, only for about a decade.  Now here we are, once again deciding on the fate of the Library Lot – that small precious piece of real estate next to the Ann Arbor District Library.

Rendering of proposed Core Spaces building as proposed to Council.

The Ann Arbor City Council will vote on this resolution on April 17, 2017.   It either will or will not award development rights for the Library Lot (retaining ownership of the actual land) to Core Spaces, which describes itself as “a full‐service real estate development, acquisition and management company”, and further identifies its target markets as “educational”, in other words, student-oriented.  The result will be a 17-story building, bigger than anything we could have imagined 10 years ago.

Feelings are running high and the volume of email to Council must be stupendous.  Just to make the drama more intense, because the resolution disposes of city property, it requires 8 of 11 Council votes (counting the Mayor).  Three CM have made their dislike fairly public (Eaton, Kailasapathy, Lumm).  So each one of the remaining 8 can be the one to make or break the deal.  It is generally understood that Mayor Taylor favors it.  Are all the rest committed to support it, in the face of a great deal of public opposition?  Some, especially those who are new to Council or up for re-election, are likely feeling the heat.

Why is this so important to so many?  Its importance (as measured by heat and light generated) is far more than most tall building development projects downtown.  There are many facets to the issue.  But most of all, this decision is symbolic about the direction that Ann Arbor is headed.  In many ways, it is a battle for the soul of Ann Arbor.

What Do We Want To Be?

This article from the Ann Arbor Observer (2005) outlined many issues and described the Calthorpe public process. (Click for link.)

The battle for the future of Ann Arbor has been the underpinning of our politics for over 10 years. One could argue that it began with the election of John Hieftje as Mayor in 2000, or the renewal of the DDA Charter in 2003.  That launched an emphasis on downtown development that has changed not only the appearance of Ann Arbor’s downtown, but its perceived purpose and use. There was also a shift in the objectives for the city as a whole.  We have often thought our city to be rather special, in a community-supportive, casually fun but also fairly intellectual, colorful but not in an overly contrived sort of way. See our post, What Does it Mean to be an Ann Arbor Townie. In other words, a city to serve its citizens and welcome visitors on our own terms.  But in recent years, a new agenda has been espoused by the majority on our City Council.  This is spelled out at length in The Placemaking Agenda and Ann Arbor Politics. Briefly, it is to transform the city into a cradle of entrepreneurship and enterprise, especially by attracting “talent” (young people who can start or sustain high-tech enterprises).  Much of this is based on the concept of the “Creative Class”, as described by the urbanist Richard Florida in his 2002 book.

One could argue that Ann Arbor is doing very well and is succeeding in this talent-seeking strategy.  We are listed over and over again on national lists as in the top 10 for various qualities.  Maps showing economic success usually show our Washtenaw County as standing out.  But interestingly, Richard Florida himself has had something of a change of heart. Florida’s recent book, The New Urban Crisis, recognizes that the type of “success” we have enjoyed has come with a cost to whole swaths of demographics.  As he says in a recent article,

 As techies, professionals, and the rich flowed back into urban cores, the less advantaged members of the working and service classes, as well as some artists and musicians, were being priced out….I found myself confronting the dark side of the urban revival I had once championed and celebrated…As the middle class and its neighborhoods fade, our geography is splintering into small areas of affluence and concentrated advantage, and much larger areas of poverty and concentrated disadvantage.

And a summary from another article :

America today is beset by a New Urban Crisis. If the old urban crisis was defined by the flight of business, jobs, and the middle class to the suburbs, the New Urban Crisis is defined by the back-to-the-city movement of the affluent and the educated—accompanied by rising inequality, deepening economic segregation, and increasingly unaffordable housing.

Sure enough, a graphic from the article shows that Ann Arbor is #11 on his “Urban Crisis Index”.  Do increasing economic inequality, loss of affordability in housing, and racial/class segregation sound familiar?  Washtenaw County paid good money a couple of years ago for a consultant to tell us this about ourselves.  So, Ann Arbor is succeeding as a business proposition.  Is it losing what makes it successful as a place to live?  As a community in the whole?

(Florida will be keynoting this year’s SPARK meeting on April 24.  It’ll be interesting to hear what he says about our local situation.)

The Importance of the Library Lot

So what does the Library Lot have to do with all this? Because the Library Lot belongs to the entire City of Ann Arbor, and thus presumably its public, and because the project is so wildly out of scale with the downtown historic districts that supposedly make our downtown successful, not to mention the residential neighborhood immediately to the south, and because while this is a public asset, the benefit to the Ann Arbor public has not evidently been a consideration. (No public process has been employed to arrive at this use.) For all these reasons, the debate has been more passionate than for other downtown projects.  The Ann Arbor public continue to assert ownership.  For that reason, it stands as a symbol of the decisions to be made about our downtown, and thus our city.

But many other interests have eyed this choice little bit of real estate for particular ends.  The DDA has had a single-minded intent to increase the magnitude of development in the downtown, generally.  A group of influential insiders put forth a plan as early as 2008 to build a hotel and conference center on the lot, with the DDA’s assistance.  The Library Lot Conference Center controversy and battle is recorded in this series of posts.  The effort was finally killed by Council resolution in April, 2011 after a public campaign by concerned citizens.  Meanwhile, the DDA had constructed an underground parking structure in which part of the structure was specifically reinforced to support the intended hotel.

Projection of desired building density (700 F.A.R) for Library Lot in DDA study, 2013. Purple area is unreinforced “plaza”.

Things slowed down for a bit while the Ann Arbor District Library planned to build a new library.  The new building would not have been on the Lot (the current building would first have been demolished) but doubtless the Lot would have been used for staging.  However, that bond proposal was defeated in November, 2012.   The DDA sprang to the task of planning the immediate area in a project called “Connecting William Street”.  They used a pseudo-public approach (online surveys, public meetings) which unsurprisingly arrived at the conclusion that a tall building was needed on the lot.  The plan met with derision in some quarters and the City Council declined to adopt it.  It was added to the “resource documents” for the Planning Commission in March, 2013.

In a memorably feckless act (thank you, CM Kunselman), Council passed a resolution in April 2014 to hire a real estate broker.  They put the Lot up for sale.   Although the resolution cites the Connecting William Street project, no further effort was made to establish what the Ann Arbor public saw as the best use for this site.   Further, it accepted the notion that the reinforced portion of the lot would be used for building.  So here we are.

From page 42, Downtown Development Strategies, Calthorpe Associates, 2005

The Calthorpe process, 2005, is often cited as demonstrating that there was a public process followed for the fate of this parcel.  There was a report on Downtown Development Strategies issued (many recommendations have been ignored).  It does not make a specific recommendation on the Library Lot.  However, it calls for building height to be stepped down toward the residential neighborhoods, especially that last block before William.  And it calls for a Town Square.

ADDENDUM: The Library Lot was briefly, but seriously, considered as a site for a new City Hall, a.k.a Municipal Center, in 2006.  Here is the task force report. Community Security and Public Space 2006 The report specifically notes the importance of “an outdoor gathering place” and put the Library Lot high on the alternatives for a new Municipal Center that would include a public space.

 

It’s Not Just About a Park

Admittedly, the idea of a downtown “Central Park” (or Town Square) has been a major theme of the disputes about the Library Lot.  The Library Green Conservancy has been advocating vigorously for a park on the portion of the lot without special reinforcement, and there was that whole problem with collection of signatures on petitions. The DDA has been trying to put a damper on that idea for years.  (The Connecting William Street exercise did not even acknowledge the possibility.)

It’s Not Just About the Parking

The deal has serious implications to downtown parking.  It would give away a substantial part of this expensive structure to a private enterprise. (Some historical details are here: note we will be paying interest for many years to come.)  There are also legal questions that have not been satisfactorily answered.    Read it here.  Finally, it will reduce access to downtown by its customers. Downtown business organizations have objected.

It’s About Our Downtown, Our City

Our social media and comment pages are flooded with anguished complaints and worries about this project.  It is clear that our citizens do not believe this will enhance our experience of our city and that it will likely damage the downtown.  The comments shown below are from my personal social media feeds (Facebook, Nextdoor) and are unedited but anonymous because I don’t wish to make the writers’ identity the issue.  (Click on the boxes to read at full magnification.)

 

 

 

 

 

Note that these comments are all about quality of life and the viability of our downtown businesses.  There is a concern about the resilience of this part of our community, and of course the Downtown is still the center of town, and a location that affects us all.

If Council does vote to approve this deal, they will be going against the express wishes of a substantial number of their constituents.  Based on comments in the media, it seems that they are dazzled by the cash offer.  A complication is that it will supposedly be an assist to “affordable housing”.  But the benefits in that regard are modest.  (One scenario even has the City paying over a million dollars back in order to obtain more units.)  We have not really had a city-based discussion about what we want in “affordable housing” or what our best means of achieving that are.  It seems imprudent to sell off one of our choicest assets for this purpose, especially since so many questions persist about the effects of the parking on both businesses and city finances.  If our city finances are so challenged (and they do not seem to be) we should be looking at savings or new taxes instead of selling off our real estate.

Or – is Council going to go ahead with this because of the dogma of dense development?  In that case, are they considering the health of our present community?  Or are they aiming for a different one?  If the latter, they’d better consider more carefully the consequences of their actions.  A city is a complex ecosystem.  The Council has a solemn duty here.  I hope that they vote to preserve our community.  It has so much good, still.

ADDENDUM: Here is the Ann Arbor News preview of tonight’s vote. “And the consequences of whichever way the council votes could last for generations.”  Yup.

UPDATE: The Council voted to sell the lot, 8-3.  All the usual suspects voted as anticipated.  Here is what Mayor Taylor had to say about it.  

“I love Ann Arbor the way it is. We are not Chicago or Detroit, and I don’t want to be. ”

 

 

 

 

Categories: Basis, Business, Downtown, politics, Sustainability

Comments: 7 Comments

Making a Federal Case for Ann Arbor Rail

April 3, 2017

As we related in the last post, Ann Arbor has been dreaming of trains for the last decade. We have paid for multiple studies, and detailed plans and reports have been produced. Our Mayor, Christopher Taylor, has named rail travel as a top priority. In a letter sent to many constituents early in January, he stated “Expanded rail service is vitally important to the future of Ann Arbor”. (Here are some further comments reported by the Ann Arbor News.) Now the City Council has just a couple of months before the next Budget is adopted.  How much of the City’s resources should continue to be devoted to this purpose?  After so many years with rail in the future, is it time to relegate these dreams to the past?

For Love of Trains

First of all, this question is not about whether we love trains.  Of course we love trains.  Most of us of any age or travel experience have happy memories to relate.  (I have a sentimental description of my own experiences in this post from 2011.)  Trains are part of the sensibility installed in us from childhood.  Here is a video of a favorite childhood song about trains.  Wouldn’t you like to climb aboard on this train, or at least join in?

Trains are a great mode of travel.  Sit and read (or work) or just look at the scenery. No worries.  Why wouldn’t we want to be able to travel to Detroit without worrying about freeway traffic and parking?  And as a commute, it can’t be beat, especially if that “last mile” problem can be solved.  (Transit from the station to work.)  If you have visited a city with a light rail system, you know how nice it is to travel around an urban area that way.  Just hop on, ride a few minutes, hop off.

For all these reasons, and for several others, the dream has survived since 2006 and has been enthusiastically adopted by many on our Council, and by many citizens.  The rail projects have all been studied and are ready to be implemented, more or less.  But is this possible?  Most of all, can we afford this vision under the present circumstances?

A Very Expensive Wish List

Because consultants have been hired to do studies of our rail wish list, we have some rather good numbers now for how much these projects will cost.  The costs for the Ann Arbor Train Station have been kept rather obscure through the Environmental Review process, as has much other information. A construction estimate was provided via a FOIA by Dave Askins (thanks to a direct response by Howard Lazarus, the City Administrator).  A couple of feasibility studies have been completed for the Connector. The North-South Commuter Rail (aka WALLY) Feasibility Study has recently concluded; here is the Financial Analysis.  The Ann Arbor-Detroit Commuter Rail was folded into the Regional Transit Authority and cost estimates were included in that plan (RMTP) .

From all of these studies, we can compile a total of the full cost of the rail wish list for Ann Arbor.  Note that these figures are not the amount that the City expects to pay.  The Connector, WALLY, and the Ann Arbor-Detroit Commuter Rail are all expected to be cooperative projects and other governmental entities are expected to contribute. (The Ann Arbor Station is an Ann Arbor project alone.)  But in every case, the expectation has been that the main burden of the cost will be borne by the Federal Government.  Often the statement has been made that 80% of the cost will be Federal, and the 20% local matching amount is partly offset in theory by the State of Michigan (MDOT).

Costs for these projects are of two types: Capital (original construction) and Operating (annual cost of operation and maintenance).  Capital costs are a one-time investment, but operating costs are perennial.

Capital costs for four rail projects

Annual operating costs for three rail projects. It is assumed that Amtrak would continue to operate the train station. These are gross costs; offsets for fares and fees not subtracted.

Making Decisions about the City Budget

Most City expenditures are based on fairly accurate estimates, either for existing contracts or from well-fleshed out plans.  Most budgeted items will be spent as described, with a fair certainty that the deliverable will be produced.  There is never quite enough money for all the things we would like to achieve as a community.

The City Administrator, Howard Lazarus, has been making presentations to the Council in advance of the budget.  Capital improvements are suggested for firehouses, streetlights, sidewalks, dams, and signals.  The slide also showed the following amounts ($millions) for FY 2018 and FY 2019. The last column to the right is “FY 2020+”.  Taken all together, the rail items constitute 43% of all capital improvements.  These are General fund expenditures in the City Budget for the next couple of years.

From the slide of 2018 capital improvement costs. Figures at bottom include more items than shown here.

If Council is going to continue to use Ann Arbor city funds (taxes) to pursue these rail projects, it is making a calculated gamble.  We are continuing to put chips on the table in hopes that there will be a big payoff.  And the expectation has been that the deep pockets at the table belong to the Federal government.  That is no longer true.

The Shifting Sands of Federal Funding

With the Trump presidency, predictions are impossible.  One can, however, hear solid hints of what he is thinking.  There are other players in Federal funding, especially many different factions and interests among members of Congress.  Here are a few high points about Federal transportation funding, which has usually been very contentious.

  • The gold standard is outright grants.  In other words, Federal taxes distributed directly to states and localities for use in transportation projects.  This is what we would like for all our projects.  There has been a move in recent years toward encouraging localities to apply for loans instead. The TIFIA program is an example.
  • Pennies were falling from heaven in 2009, with the Obama stimulus program, better known as the American Recovery and Reinvestment Act (ARRA).  This was especially friendly to transit programs and included the high speed rail program (HSIPR)  program that has paid for our preliminary rail station study.  It was not renewed with the new Republican Congress in 2010. All ARRA grants expire at the end of the current fiscal year (September 2017).
  • The main source for transportation grants has been the Federal gas tax, or Highway Trust Fund.  The tax rate has not increased since 1993.  This fund was originally to pay for the Interstate system.  A mass transit fund was added to it in 1982.  The Transportation Act, which is the law that governs how the money is spent, has expired a number of times and been renewed and rewritten.   This is always a big food fight in Congress.  The way the money is allocated changes in each revision.  There are always legislators who would like to get rid of the mass transit and alternative transportation provisions so more money can be spent on roads and bridges.
  • Through some miracle (and our Senator Debbie Stabenow deserves a lot of credit), the Transportation Act actually got revised and renewed in the last Congress.  The name always changes.  The last bill was MAP-21; this one is  the FAST act.
  • An important feature of the Transportation Bill is that items funded by the Highway Trust Fund are not dependent on the Federal Budget because they are not part of the General Fund.  This has kept funding of mass transit programs, for example, very stable.
  • The FAST Act included rail travel for the first time.  BUT it did not attach Highway Trust Fund monies to it.  RAIL IS DEPENDENT ON ALLOCATIONS IN THE FEDERAL BUDGET (the General Fund).
  • Congress has been keeping the Federal Government running by a series of continuing resolutions.  It has not actually passed a budget for a long time.  The current Continuing Resolution expires on April 28, 2017.
  • Meanwhile, President Trump and Congress are trying to conclude negotiations on a variety of bills and spending priorities.  Here is the Budget Blueprint recently published by the White House.

Important Cuts and Immediate Significance

The two most important points affecting grants to local governments for rail in the White House blueprint are the cancellation of TIGER grants and the loss of New Start funding for new projects.  TIGER has been a source of discretionary grants – very competitive (only 1 in 20 grant applications funded) but very essential to localities.  That is the source that Ann Arbor hoped to tap for the new train station.  New Starts have been the method of choice to start a new rail system “fixed guideway program” (which includes Bus Rapid Transit); this would have been the likely source of cash for the Connector or possibly one of the commuter rail systems.   Without these, there is literally no Federal grant program that could realistically pay for our rail programs.

Even if Congress does not follow this blueprint, it must still appropriate funds for any grant program.  With the Continuing Resolution due by April 28 and tax cuts looming on the horizon, this seems unlikely.

The Trillion-Dollar Question

What about the infrastructure program that President Trump has mentioned?  It would not be grants, but rather tax incentives for private investment.  The likely mechanism would be “P3” (Public-Private Partnerships) programs where the locality borrows money from private investors.   A preliminary list of likely projects has been released, but has no force in law.  Many such programs will require a source of revenue, such as fares, tolls, or fees.

ADDENDUM: The Administration’s likely approach is being telegraphed by Elaine Chao, the Transportation Secretary.  In this speech she says,

“Investors say there is ample capital available, waiting to invest in infrastructure projects. So the problem is not money. It’s the delays caused by government permitting processes that hold up projects for years, even decades, making them risky investments. That’s why a critical part of the President’s infrastructure plan will include common-sense regulatory, administrative, organizational and policy changes that will encourage investment and speed project delivery.”

This is a clear call for privatized projects.  What is not clear is what “impediments” are going to be cleared.  Agreement by local governments? Safety regulations? Environmental hazards?  Best not to picture this too fully.

The Gamble

Since it is so unlikely that there will be Federal grants to pay for the wish list of rail projects, what should the City Council do?  One alternative would be to sit tight and wait for developments.  But will they spend substantial funds in the next year on these projects, with all the other priorities? To do so seems to be a triumph of hope over prudence, indeed.  Perhaps there is a good lottery running somewhere.

 

 

Categories: civic finance, Transportation

Comments: 8 Comments