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Posted on Wed, Jul 3, 2013 : 3:55 p.m.

Ann Arbor DDA agrees to help fund start-up of South U improvement zone

By Ryan J. Stanton


Ann Arbor DDA officials say increased activity on South University Avenue, in large part due to new high-rise apartments in the area, is one reason why forming a Business Improvement Zone to address issues of cleanliness and visitor comfort makes sense.

Ryan J. Stanton |

A potentially year-long process to form the South University Business Improvement Zone is set to begin with funding approved on Wednesday.

The Ann Arbor Downtown Development Authority approved a $59,200 grant to support the effort to create the new special assessment zone.


The Blue Leprechaun Irish Pub is among a number of pubs and restaurants on South University Avenue that cater to a mostly college-student crowd.

Ryan J. Stanton |

The total cost is expected to be about $84,200, with DDA funds matched by $25,000 from South U property owners and the South University Area Association.

"I think this amount is warranted, and it's something that I think we as a DDA want to promote," said DDA board member Joan Lowenstein. "There is support from property owners."

At least 60 percent of property owners along South U will have to agree to form the BIZ, which would provide a mechanism for special assessments to pay for upkeep of South U.

With financial support from the DDA, a BIZ was established on Main Street in 2010, and property owners there say it's been a major success. Lowenstein serves on the Main Street BIZ board.

The Main Street BIZ's latest annual report for 2012-13 shows it brought in more than $120,000 in annual revenue this past fiscal year from special assessments on commercial property in the designated zone, plus another $4,182 in contributions from the DDA.

Most of that money is used to pay for snow removal, sidewalk sweeping, handbill removal, sidewalk power-washing and landscaping. Administrative expenses were budgeted at $25,685.

Maggie Ladd, executive director of the South University Area Association, said the South U probably will provide services similar to those provided by the Main Street BIZ.

A BIZ Blueprint was established as part of the Main Street BIZ's formation a few years ago and that will be used as a guide. Lowenstein that will help lower costs of forming the South U BIZ.

"When we contributed to the Main Street BIZ, part of our contribution was to create a template that could be used for future BIZ's," she said. "That, in fact, happened, but the template isn't just a 'fill in the blanks.' It will save them a huge amount on a lot of the legal costs — figuring out what you have to do according to statute — but there's a lot of legwork involved."

She said assessment amounts need to be calculated, and they'll be different for different property owners — depending on the size of their property and the size of their buildings.

The grant from the DDA will enable the group to hire a consultant to guide them through the process of creating the BIZ, as well as cover administrative costs.

"There's a lot of work that needs to be done by the consultant in order to bring this to fruition, and it's hard to quantify how much that template has saved," Lowenstein said.

DDA board member Keith Orr said it makes sense for the DDA to support the formation of a South U BIZ because it can do things that fall outside the scope of the DDA's mission.

"We're responding to a request from the local businesses," stressed DDA board member Russ Collins, executive director of the Michigan Theater. "We do try to support local businesses when they request support from us to help them fulfill a mission that we feel fits with our mission."

Previous story: South U could follow Main Street's lead to form new Business Improvement Zone

Ryan J. Stanton covers government and politics for Reach him at or 734-623-2529. You also can follow him on Twitter or subscribe to's email newsletters.


Sam S Smith

Thu, Jul 4, 2013 : 2 p.m.

Here's an idea: How about the DDA spending money taking care of the flooding in Ann Arbor? No, that would make too much sense!


Thu, Jul 4, 2013 : 1:33 p.m.

I'm a little confused about the money here; they have to pay a large amount of money in order to develop a plan that outlines how much money to charge property or business owners (that's what these special assessments are, right?) in order to use that money to upkeep the properties. So it's mostly for landscaping, snow removal, etc. Isn't snow removal a legal requirement? Why are we allocating tax dollars to figure out a plan for snow removal? There's a blurb in the Observer outlining how this must be done; note the word MUST. Wouldn't it cost less and be more in these property owners/business owners' interests to just upkeep their property and maintain a thriving business, rather than paying a consultant to plan out how to pay additional taxes on themselves? This seems like how protection money is described by thugs.

Sam S Smith

Thu, Jul 4, 2013 : 1:16 p.m.

Fact: The city of Ann Arbor will do anything for the transient U of M students but not so much for the tax paying residents


Thu, Jul 4, 2013 : 4:27 a.m.

leave Souith Univ alone..the days of Redwood and Ross/Village Corner/Community News are long gone. It has evolved to be what it is and is not a destination for AA citizens as a whole.It's a little sub-region for students mingling on the way or back from class and watering holes they can walk back to their rental apts later at nite.. What are you going to do? try to market it to Senior Citizens with bike rentals or something-then mix families/seniors into the sea of students with studying on their mind or secondarily, alcohol influenced judgement in the evening/weekends??. There were decent shops 30-40 yrs ago: the wealthy students bring their designer items with them now days.....they'll spend their pocket money on food/drink.....we don't need to siphon our money for this. It's one of the worst areas to navigate and a citizen of ann Arbor quickly realizes the folly of aproaching the area.New hi rises awash with students should be a boost for any food/drink establishment. Whatever is the need should be learns not to expect much of that when DDA is part of the equation.


Thu, Jul 4, 2013 : 3 a.m.

So the City taxes everyone. Gives some of that money to the DDA. The DDA gives the money back to the taxed business' After taking a cut of the action. to tax the same local business' all over again without representation only to help them coordinate their business activities. Got it! Like another version of the mob 'protection" rackets offering merchants city-like 'services' for a small fee. Favorites get better protection than others. Crikee. And we are to believe that Ms. Lowenstein is only a DDA batton twirler, too. Speaking of ridding the city of corruption, how did the "newand improved" City Council members poised to clean up Tree Town suddenly become more supportive of the DDA? Must be the water. Dump the DDA.


Thu, Jul 4, 2013 : 3 a.m.

Maybe they can bring in some more variety of store down there other than sushi restaurants and condom stores and skate boarder hangouts. That area has really degraded in the last 20 years. I lived right down there while in school and it used to be far more diverse and vibrant.


Wed, Jul 3, 2013 : 11:18 p.m.

The DDA should be abolished.


Wed, Jul 3, 2013 : 10:38 p.m.

(From Ryan Stanton's revised article) "With financial support from the DDA, a BIZ was established on Main Street in 2010, and property owners there say it's been a major success." and "A BIZ Blueprint was established as part of the Main Street BIZ's formation a few years ago and that will be used as a guide." So why spend nearly $60,000 for a consultant when a proven successful BIZ blueprint already exists? I believe recommendations from a third-party "expert" consultant will benefit the DDA and South U businesses by averting criticism aimed at expending tax payer money for their self-serving purposes.


Thu, Jul 4, 2013 : 1:53 a.m.

Ryan J. Stanton -- Acknowledged and thank you for the explanation.

Ryan J. Stanton

Thu, Jul 4, 2013 : 12:11 a.m.

No article was revised. We wrote a story previewing the meeting and a story covering the meeting. This is the coverage. The preview is linked to in this story.


Wed, Jul 3, 2013 : 9:48 p.m.

"DDA board member Keith Orr said it makes sense for the DDA to support the formation of a South U BIZ because it can do things that fall outside the scope of the DDA's mission." @Ryan: Can you please clarify this statement? Snow removal would be within the scope of the DDA's mission. What exactly will the BIZ do that the DDA cannot do?


Thu, Jul 4, 2013 : 3:06 a.m.

@Ryan: So, the DDA mission is "To undertake public improvements that have the greatest impact in strengthening the dowtown area and attracting new private investments." Accomplishing this mission becomes one of setting priorities depending upon cost and value. The DDA sets money aside for sidewalk repairs and ongoing maintenance of structures/ramps. How much would snow removal cost? With revenue growth, how are they planning on spending the money? Looking at their 2012/13 budget, millions are being spent on debt service for a structure that was over-engineered and over-budget. Approximately $700,000/year goes to administration. I'm not sure I understand why that number is so high. I guess the point is that basic maintenance is how the DDA started out and to some degree, providing these basics may help accomplish the mission as much or more than other priorities. If the business owners want to collectively group together, I certainly won't stand in their way. But I think we already have an entity that can accomplish the task.

Ryan J. Stanton

Thu, Jul 4, 2013 : 12:10 a.m.

I'm sure if someone on the street had the extra time to spend measuring their neighbors' buildings and hitting each of them up for a proportionate amount of money each month, they could do this on their own. With the BIZ, it's probably a little smoother process with improved reliability of funding, and everyone will participate if 60% approve it. I'll leave it up to the property owners to say whether they would have pulled together the extra $59K to make this happen if the DDA hadn't helped out. Maggie Ladd mentioned that cost was seen as a hurdle that prevented it from happening before.


Wed, Jul 3, 2013 : 10:54 p.m.

You say it will "allow" them to pool their money and do all those great things for their area. I guess I don't see what's stopping them from doing that now without the $60K infusion of tax money.

Ryan J. Stanton

Wed, Jul 3, 2013 : 10:28 p.m.

I can't speak for Keith on what he meant beyond that. That's all I heard him say. But I think it's fair to observe that the DDA is never going to be the agency that does all of the snow removal in the downtown, or all of the sidewalk sweeping, or all of the handbill removal, or all of the sidewalk power-washing, etc. The DDA focuses its TIF dollars on capital/infrastructure projects (streetscape improvements, signage, fixtures, parking garages, etc.), not ongoing operations that are handled by private property owners. However, providing a one-time shot of money to help set up a mechanism that will allow private property owners to pool their money to more efficiently keep their area of downtown looking nice and safe and clean is within the scope of the DDA's work.


Wed, Jul 3, 2013 : 9:41 p.m.

"Ladd said it's too early in the process to say for sure what the boundaries of the South U BIZ would be or how much commercial property owners would pay into it." But it is not too early to determine that DDA should provide $59,200 of tax payer money for the effort. Such a specific dollar figure demands that the DDA reveal to the public exactly how the grant will be spent. This article contains no such information. It is reasonable to believe that business owners (or one of their employees) can spend ten minutes a day or less clearing snow and debris from the walks in front of their shops. Paying for private services would be a wasteful luxury. By carefully selecting a consultant, the South University business coalition can guarantee that the advice received will satisfy their own wishes and will justify providing more tax payer dollars for private use. Apparently, the DDA's primary function at this time is be a conduit for transferring tax payer money to private interests. The DDA has the following history of supporting private interests: -- $407,000 to Zingerman's to assist with its expansion, -- $400,000 to Village Green (for its Ann Arbor City Apartments) to support its limited affordable housing, -- $9 million to purchase the parking facility from Village Green of which about a third of the parking spaces will be exclusively for public use at its First and Washington apartment building, -- $650,000 over four years for site development at the 618 South Main development. The DDA has freedom to spend its tax payer revenues anyway it wishes and benefits to the average Ann Arbor citizen is not usually obvious.


Wed, Jul 3, 2013 : 8:20 p.m.

Am I incorrect or was the first we heard about this on yesterday? And now it's a done deal with $60K of our skimmed tax dollars going to support the south U property owners as they organize themselves to take care of their own interests? Why again are we subsidizing them?

Nicholas Urfe

Thu, Jul 4, 2013 : 11:45 p.m.

We are subsidizing them because of corporate welfare for the 1%.