MAVD News: 2008

Rob Aldrich: What's the DDA's role?
Not to serve as Ann Arbor city council checkbook

Posted by mmorgan June 08, 2008 11:11AM

BY ROBERT A. ALDRICH

The Ann Arbor Downtown Development Authority's vote to approve funding of $500,000 a year for 25 years to the city for its proposed police/courts project shines a bright light on this question: Is the DDA a development authority or an extension of the mayor and City Council?

By carefully manipulating appointments, including himself and Council Member Joan Lowenstein, D-2nd Ward, Mayor John Hieftje has created a majority of supporters for city hall's desires. Why else would this body fork over funds to the city - now more than $1 million annually, or nearly one-third of the DDA's annual tax increment capture - for city projects and operations?

When constituted in 1982 and renewed by City Council in 2003, the DDA's stated mission was "to undertake public improvements that have the greatest impact in strengthening the downtown area and attracting new private investments." Funding city projects and operations may be rationalized, albeit a reach, by some as consistent with the DDA's mission, but consider where the DDA's scarce resources could be spent.

How about parking? There is no debate that Google's decision to be or not to be downtown hinges on parking that we don't have unless it's taken away from others. And what about other new businesses considering downtown as a location? While I applaud efforts by the city and the DDA to consider a large parking deck on the library lot, the DDA's commitment of funds to the city imperils the reality and certainly the long-term viability of such a deck. Quite simply, the DDA can't afford to send money to the city, maintain the city parking structures and build new ones.

The solution, according to the mayor and the DDA, is to significantly raise parking rates. This is both flawed and dangerous logic. There is not a limitless price that the market will pay for downtown Ann Arbor parking and every increase in parking rates puts pressure on downtown businesses - both employers and retailers - as the cost of occupying and patronizing a downtown business increases. In other words, forcing increases in parking rates will drive away the very patrons the DDA seeks to attract. The result could create a downward spiral of downtown property values and tax revenues that could lead to reduced city services and/or higher tax rates. Dangerous, indeed.

The DDA captures tax revenue that would otherwise go to Washtenaw County, the Ann Arbor District Library and Washtenaw Community College. Why these entities tolerate the city using the DDA as a convenient checkbook for city projects should be concerning. In a public fiscal environment of austerity, consider the luxury the city is being afforded by its comfortable relationship with the DDA.

Downtown Ann Arbor and its businesses are critical to the city of Ann Arbor, Washtenaw County, the southeast Michigan region and the state of Michigan. All of our citizens and government leaders need to challenge the mayor and council to safeguard the DDA's resources to protect and enhance downtown Ann Arbor's future.

ROB ALDRICH The writer is president of MAV Development Co. He served on the Ann Arbor Downtown Development Authority from 1999 to 2007, and was DDA chairman in 2002.

To contribute essays to Other Voices, contact Mary Morgan, opinion editor, at 734-994-6605 or mmorgan@annarbornews.com.

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