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Posted on Tue, Jul 2, 2013 : 12:05 p.m.

Joint committee formed to hash out Ann Arbor DDA tax capture issues

By Ryan J. Stanton

Ann Arbor officials have formed a special joint committee of the City Council and Downtown Development Authority to hash out issues surrounding the DDA's tax captures.

By a 9-0 vote Monday night, the City Council approved the creation of the committee, which will include Council Members Stephen Kunselman, Jane Lumm, Sally Hart Petersen and Christopher Taylor. It's expected the DDA will name its four members on Wednesday.


Council Members Stephen Kunselman, right, and Christopher Taylor, left, will serve on the new joint committee of the City Council and the DDA — along with Council Members Jane Lumm and Sally Hart Petersen, and four DDA board members.

Ryan J. Stanton | file photo

Mayor John Hieftje and Council Member Sabra Briere, D-1st Ward, brought forward the proposal to create the committee, which is expected to operate in a manner similar to the so-called "mutually beneficial committee" that worked in 2010 and 2011 to negotiate a new parking agreement calling for the transfer of 17 percent of DDA parking revenues to the city.

This time, it's the DDA's growing tax revenues from downtown properties that some city officials and DDA officials are playing tug of war over.

Kunselman pushed heavily earlier this year — in the face of opposition from the mayor and downtown business groups — for ordinance changes that would effectively slow the DDA's revenue growth and send more tax revenue directly to the city and other taxing authorities like the library and the county, and the Ann Arbor Transportation Authority and Washtenaw Community College.

The DDA recently revised its budget for 2013-14 to factor in new revenue projections from the city assessor's office, showing more than $4.5 million in tax revenues coming this fiscal year. Kunselman at one point proposed reducing the DDA's expected tax capture by roughly $1 million, and Council Member Sumi Kailasapathy, D-1st Ward, joined him in his quest.

The City Council decided in early May to postpone making any ordinance changes regarding the DDA until the council's first meeting in September.

Briere said that means the joint committee must get to work quickly. She's expecting the council will consider DDA ordinance amendments on Sept. 2.

"It is in the public interest that the DDA and the City Council work together for the continued improvement and development of downtown," reads the resolution unanimously supported by council Monday night, directing the new joint committee to provide the City Council with proposed ordinance changes regarding the DDA.

In an ideal world, Briere said, the resolution would allow time for significant public input and collaboration with the other taxing authorities affected by the DDA's tax capture. She said the joint committee could request a change in timeline in order to have a more complete process.

The joint committee is expected to report periodically on the ongoing discussions at meetings of the City Council. Additionally, City Administrator Steve Powers is expected to direct city staff to work with the DDA's staff to help craft the proposed final draft ordinance changes.

Though he will be serving on the joint committee, Kunselman said he had nothing to do with bringing forward Monday night's resolution — it was all Briere and the mayor.

"I think it's just giving some structure to something that's already underway," he said. "Council Member Petersen and I have already met with some members of the DDA and some staff, trying to work these things out, so if they want to solidify it, then we'll just see how that goes."

Briere and Hieftje originally proposed calling it the "mutually beneficial committee," keeping the name of the subcommittee from two years ago, but Kunselman said that sounded like "too much back scratching." Council members agreed to just call it a joint committee.

Only three members of each body were initially contemplated, but Council Member Marcia Higgins, D-4th Ward, pushed to have Lumm appointed to the committee.

"I think she has put a lot of work into this and has been very thoughtful, and has taken an interest in the DDA for a long time," Higgins said of Lumm, who represents the 2nd Ward on council.

The DDA's governing board is expected to vote Wednesday to authorize a $300,000 grant to the city of Ann Arbor for the replacement of streetlights on Main Street. DDA officials argue the streetlight poles between Huron and William streets have deteriorated and must be replaced.

"These decorative streetlights, including some with multiple globes, have become an important symbol of the Main Street commercial area and do a great deal to support the great amount of activity in this area," the DDA's proposed resolution states.

The estimated cost to replace the streetlights is $516,000, which includes new decorative poles with banner brackets and LED light fixtures — including two poles that will be taller to accommodate banners being strung across Main Street for special event.

It was determined through the city's recent budget process that the DDA would allocate $300,000 toward the cost of the project. The city will cover the other $216,000.

The City Council also went on record recently with asking the DDA to fund three new downtown police officers. That's listed as a discussion item on Wednesday's DDA agenda.

DDA Executive Director Susan Pollay said the DDA's Operations Committee members met to discuss the city's request for downtown beat cops in June, but they haven't come to any conclusion yet. The next meeting of the Operations Committee is scheduled for 11 a.m. July 24.

In addition to the joint committee working on DDA issues, council members took action Monday night to resurrect a citizen advisory committee to take a final look at zoning issues in the city's R4C and R2A zoning districts. Those districts have been the subject of scrutiny ever since the City Place project was proposed on Fifth Avenue in 2009 and city officials realized other near-downtown residential areas might be at risk for out-of-character development.

The committee is expected to advise the Planning Commission on draft ordinance amendments to be presented to City Council. There is no timeline for the committee's work.

The Planning Commission has recommended that City Council support the changes in the R4C/R2A Recommendations Report passed along to council on May 20.

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.



Wed, Jul 3, 2013 : 7:47 p.m.

Joint committee formed to hash out Ann Arbor DDA tax capture issues. Sounds like a former "Hash Bash" participant wrote this! Yes, I know I'll be censored, but it sounded good!


Wed, Jul 3, 2013 : 3:33 p.m.

I concur, the DDA needs to be eliminated. Where and how our tax dollars are utilized should be decided by our elected officials, not by an appointed group who do not answer to the community. The DDA's responsibilities and duties should be done by the City Council. Tax dollars need to be directed where they do the most good for the most citizens.


Wed, Jul 3, 2013 : 12:47 p.m.

It seems to me that we have two bodies within the city dictating what should be done within the city. The elected officials and DDA. Personally, I do not see any reason for have two like bodies. All tax dollars, parking dollars, etc. should be put in the city coffers, they should be making the decision about how the funds should be spent--not some organization that was hand picked to run the show so to speak. Said it before and will say again, DDA needs to go. In fact not too long ago the city had to bail them out if I remember correctly from news articles read.


Thu, Jul 4, 2013 : 9:11 a.m.

The DDA is an appointed body whose membership was determined by the mayor. With no fear of being voted out of office, DDA members can charge ahead with their own agendas spending tax payer money as they wish or, more accurately, as the mayor wishes. The mayor will likely remove any member who dissatisfies him. The only way the Ann Arbor citizens can change the DDA or eliminate it is by electing a new mayor.

Colorado Sun

Tue, Jul 2, 2013 : 11:14 p.m.

The DDA and insider business owners connected to local politicians are who benefit from the current arrangement with public funds. The DDA votes for projects that wealthy business owners do not pay for but benefit from - stuff like parking area projects. The local business owners reciprocate by giving political support to the elected officials who vote on these projects. Nader Nassif, an attorney, sits on the DDA however his law firm depends on City Council to approve his firm's six-figure fees for providing indigent legal services to the District Court. City Council members have a lot of potential influence on how he votes on the DDA as he relies on their goodwill to approve compensation for legal services. Career pols such as Leah Gunn and Joan Lowenstein also have close ties to City Council's "Mayor's Club". Term limits and tossing Hiefje off the DDA are steps in the right direction. The DDA needs to be reformed. There are abuses that need to be confronted. Sumi Kailasapathy, Steve Kunselman and Jack Eaton have been fighting to advance the public interest on this sorry situation.


Thu, Jul 4, 2013 : 9:05 a.m.

I could not have said it better myself!

Jack Eaton

Tue, Jul 2, 2013 : 8:47 p.m.

The Ann Arbor ordinance that created the Downtown Development Authority (DDA) has always included language to limit the rate at which the DDA's revenues grow. A couple of years ago, the City and DDA agreed that the DDA had captured more downtown property tax revenue than it should have. The DDA returned the excess amounts to the City, County, Library, Transit Authority and Community College. The following year, the DDA defiantly decided that it had not been collecting too much and insisted that the City return to the method of calculating the DDA's TIF revenuies to the pre-correction method. Think about that for a minute. The DDA is subordinate to the City, but it told the City how to interpret the City's DDA ordinance. More important, the City followed the directions of its subordinate body. This year, the DDA will receive about $4.5 million dollars in tax revenue that has been diverted from other governmental bodies. Those other entities have all been cutting back and exercising fiscal restrain while the DDA has watched its revenues grow dramatically. In addition to the diversion of the millions in property taxes, the DDA receives about $10 million per year in downtown parking revenue. Whatever this committee is called, let's hope that our City leaders exercise some control over the rate at which DDA revenues and spending grow. The neighborhoods could use some of that money to address flooding problems, to repair roads and to staff the police and fire departments.


Thu, Jul 4, 2013 : 9:30 a.m.

Quite right, Jack. Unfortunately, the TIF revenue received by the DDA has to be applied to servicing the DDA's bond issues. Remember the $47 million dollar underground parking facility next to the downtown library? In fact, the DDA has been generating a series of deficit budgets which were balanced at the expense of the reserve funds which are dangerously low in money at this time. Without being allowed to receive increased TIF revenue the DDA would have insufficient funds to distribute grants or carry out capital projects that appeal to the mayor.

Linda Peck

Tue, Jul 2, 2013 : 9:46 p.m.

Amen to that, loudly.


Tue, Jul 2, 2013 : 8:02 p.m.

perhaps the DDA could find the money to put a couple of trash cans along 4th Ave from Huron to Ann St. I'm tired of the trash being thrown on the ground for lack of receptacles.


Tue, Jul 2, 2013 : 8 p.m.

how old are these fixtures? Perhaps the DDA would best be served by buying quality products to begin with...every one of the new parking kiosks began rusting before they were a year old...what a frigging waste of time and money.

Dog Guy

Tue, Jul 2, 2013 : 5:45 p.m.

Of eight members, only two do not sing in the Hieftje choir. This joint committee won't need the joint to keep it mellow.


Tue, Jul 2, 2013 : 9:02 p.m.

@DG - Because they're going to hash it out?


Tue, Jul 2, 2013 : 7:05 p.m.

The deliberations of this committee will be carefully scripted by hizzoner. It's as real as pro-wrestling.

Linda Peck

Tue, Jul 2, 2013 : 4:17 p.m.

It seems reasonable to have a look at what is being "given" to DDA from taxpayer's funds and make some choices based on priorities for the betterment of our city. If police protection is coming under the DDA, at least in part, due to the request for the DDA to fund downtown beat cops, it just seems maybe the DDA is getting a little too much money. Would these DDA funded officers be part of the AAPD? I support more police officers in Ann Arbor, always have. We don't have enough of these important protectors of our safety. We could double or triple the numbers of officers and this would make me happy. But why would this be under the DDA's auspices?

Ryan J. Stanton

Tue, Jul 2, 2013 : 4:33 p.m.

Yes, they would be AAPD officers. Just with DDA funding, potentially.