Our Town versus Big City
The clash of cultures over downtown.

by Vivienne Armentrout

Two bold initiatives were launched nearly simultaneously in 2003, both promising to ensure Ann Arbor's future as one of Michigan's preeminent communities.  In an interview with the Observer at the time, mayor John Hieftje said that it "makes sense" to consider both a millage to preserve a greenbelt around Ann Arbor, and rewriting planning rules to encourage more housing downtown.

That October, city council established the Ann Arbor Downtown Residential Task Force, charged with examining barriers to housing density in the downtown and recommending ways to remove them.  Then, in November, Ann Arbor voters enthusiastically endorsed a millage of 0.5 mills for thirty years, "for preservation and protection of parkland, open space, natural habitats, and city sourcewaters."  Thus, two of the dominant themes in Ann Arbor's recent history were joined.  These are the push for parks and open space, with controls on development; and the push for intensive downtown development, with the promise of more affordable housing.  In the past these two impulses have been at odds with one another.  Now, with a vigorous community debate taking place about the future of the city, especially its downtown, the question is whether the themes have become complementary and mutually supporting, or are still in conflict.

The drive for parks and open space has been part of a neighborhood-centered wish for stability, tranquility, and quality of life.  While recreation and important natural features (especially the Huron River) have been considerations, a wish to slow or stop development in and around neighborhoods has been an important factor at least since 1980s.  From Black Pond to Bird Hills to Cardinal Woods to Bluffs Park to Dicken Woods, the story has become familiar:  a development is proposed on land that has been open space since anyone can remember; the neighbors meet, discover important environmental benefits to the property, and persuade the city to buy it as a park.  In his first campaign for city council in 1999, John Hieftje alligned himself with the impulse.  His campaign brouchure promised to "protect neighborhoods"; it went on, "We are being overwhelmed by uncontrolled growth on the fringes of the First Ward.  No one is asking what effect this will have on the people who already live here.  Projects that diminish our quality of life should be rejected."

The conflict between growth and quality of life has extended to the downtown and has been informed by the historic preservation movement (Observer, November 2005).  Since the city's founding, cycles of development repeatedly have demolished familiar downtown landmarks and imposed new buildings that are out of scale with historic structures.  But preservationists saw the waves of high-rise construction in the 1960s and 1980s as particularly destructive, and between 1989 and 1992 five new historic districts were established downtown.

Both of these urges have frustrated tow other interest groups:  developers and affordable-housing advocates.  While the one has pointed to potential increases in business opportunity and tax base, the other has decried the movement of Ann Arbor toward being an enclave of the well-to-do.  In the last decade, these two forces have found common cause in the idea of developing more and taller buildings downtown.

The politics of parks

The awkward political dynamic for many city council members over the last twenty years is that a lot of the voters they depend on for political support are neighborhood and parks advocates whose views they do not share.  Most Democratic council representatives have been affordable-housing advocates, and Republicans have been business and development supporters.  But the Ann Arbor public has consistently voted for quality of life.

Bob Elton, who chaired the citizens' group that put the first parks acquisition millage on the 1988 ballot, recalls that council Democrats refused to sponsor it because they were focused on an affordable-housing millage.  But the affordable-housing tax lost badly, while the parks tax won big -- and Republicans who had supported the parks millage, were startled to find themselves swept into power.  More recently, council's approval of development projects over the objections of neighbors has been met with outright revolt -- like the one this past spring when a coalition supporting a "greenway" thwarted the Downtown Development Authority's plan to build a new parking structure on the west side of downtown (Inside Ann Arbor, November).

The city's current downtown development rules were adopted after the 1980s building boom.  In its wake, a citywide process produced the 1988 Ann Arbor Downtown Plan, still in effect today and the basis for current downtown zoning.  Though the plan down not impose any height limits, it restricts most buildings in the central downtown to a "floor area ratio" of 300 percent -- roughly the same as for Main Street's late-nineteenth-century brick storefronts.  An additional 300 percent FAR is offered as a premium for projects that include housing.  Thus, the maximum for buildings containing housing that occupy their entire lot area would be six floors.  With the new historic districts, the total effect was to restrain the development of large new projects.

Meanwhile, as affordable-housing advocates continued to press the city to devote more resources to housing, they came into conflict with downtown retailers, whose top priority was more parking.  In a 1990 opinion piece in the Ann Arbor News, housing advocate Jan Barney asserted that downtown already had plenty of parking.  Arguing that "what the downtown needs is downtown residents," she urged council to promote housing instead.

Mayor Liz Brater's controversial 1991 cancellation of a parking structure on the Kline's lot at Ashley and William can be traced directly to this sentiment.

Significant progress toward the goal of affordable housing was made in the next several years, including the establishment of Avalon Housing and Washtenaw Nonprofit Affordable Housing Corporation; a collaboration with the county to replace the homeless shelter; and finally the council's appointment of a task force on affordable housing.  The group's report, released in May 2000, turned a new corner.  It called for mixed-use development, using the air rights over downtown structures for housing, streamlining approval processes, and reviewing regulations "to encourage some of the concepts of new urbanism."  For the first time, affordable housing was linked to taller and denser downtown development, and these were stated as desirable urban goals.

DDA at  the center

From its inception in 1982, the Ann Arbor Downtown Development Authority has vigorously promoted and funded downtown development.  The DDA's original development plan emphasized "public improvements that strengthen the downtown area," especially parking, pedestrian enhancements, and attracting new private development.

Almost immediately, the DDA became involved in two major projects:  the ill-fated Tally Hall development (now Liberty Square) and the Ann-Ashley parking structure.  At Tally Hall, it entered into a partnership with private developers to build a mini-mall (now used for offices) underneath a new parking structure.  The Ann-Ashley structure enabled the construction of One North Main -- and through "tax increment financing," the DDA was able to use the taxes produced by the new building to pay the debt on the structure.  (see box, right)  In 1992, the authority took over management of the city's failing network of older parking structures, and is now completing a comprehensive program of renovation and replacement.  It also launched a streetscape beautification program throughout downtown's business districts -- the brick sidewalks and "pedestrian level" streetlights are the DDA's.

When the city renewed its commitment to the DDA in September 2003, the group adopted a new development plan.  "The DDA is the only agency whose sole purpose is to safeguard the growth and vitality of the downtown . . . to anticipate changes in transportation, housing, service, and infrastructure needs," the plan states.  "It is the only agency whose mission is to sustain that which is remarkable and necessary about Ann Arbor's downtown . . . supporting the goals and concepts of the Ann Arbor Downtown Plan [and] the Central Area Plan and advocating for the resources and policies that enable these plans to be realized."  In other words, the DDA was claiming the role not only of maintaining downtown but of planning and directing its future as well.

The DDA has supported downtown development directly, with cash grants, and indirectly, by absorbing development costs such as parking and sidewalk construction.  And the authority had plenty of money to do this.  Because it collects all taxes resulting from new construction and rennovation downtown, redevelopment can become a self-fueled engine, with the DDA pumping money into new development and then collecting taxes generated by that development, which in turn feed still more development.

The DDA board, which is appointed by the mayor and city council, has typically consisted of real estate professionals and downtown businesspeople.  But it also has two strong affordable-housing activists, publisher Dave DeVarti and Legal Services of South Central Michigan executive  director Bob Gillet, who have pushed the DDA to embrace affordable housing as one of its driving principles.  With the encouragement from city council, the DDA created a separate housing fund in 1997.  And affordable housing has become one of the measures applied to many downtown developments seeking DDA assistance.

The construction of Ashley Mews, on Main south of William, demonstrated the new paradigm:  the DDA coordinated a public-private partnership to provide residential density, affordable housing, and the recycling of a city-owned property into a privately owned, taxpaying development.  The site, part of which was owned by the city, had sat for years as a civic embarrassment after an early development attempt failed.  In 1999 the city signed an agreement with Syndeco Realty, the real estate arm of DTE Energy, to construct the James Ashley Mews -- an eight-story retail-office-residential tower flanked by forty-seven townhouses.  Syndeco paid the city $400,000 for its property and agreed to reserve eight units of affordable housing to sell for just $96,000 each.  To help the project come together, the DDA contributed $75,000 toward the housing, gave $589,800 for the sidewalks and "mews" -- a public walk-through linking Main and Ashley -- and set aside 100 spaces in the Fourth and William parking structure for Syndeco's permit parkers.

Parking is a major tool used by the DDA in helping developers -- at $35,000 per space, the parking Syndeco rents would cost $3.5 million if built today.  (Because all structure parking is subsidized, fees cover only part of that cost.)  Corner House Apartments on State Street has seventy-six space in Liberty Square, twenty-one of them granted in perpetuity.  The DDA currently is considering a request from developer McKinley to lease 252 spaces for twenty years for tenants of the former TCF Bank building, recently rechristened McKinley Towne Centre.

The DDA's partnerships committee has even made direct financial contributions to some projects -- as "TIF rebates" that return part of the taxes collected from the property to the developer.  The committee has strenuously debated which developments should received these goodies.  Its guidelines say that a public benefit should result, and that the grant should be necessary to the project's viability.  But enthusiasm for projects that increase housing downtown has sometimes overridden these guidelines.  No one claimed that the DDA's help was necessary to build Liberty Lofts (the condos going up within the shell of the old Eaton factory), and the only public benefit cited was the need for more downtown residents to preserve local businesses.  Yet the committee gave it a grant of $600,000.

City council has taken DDA's project management abilities and financial muscle to heart, and has repeatedly assigned it the job of planning for downtown projects.  In 2003 the DDA was asked to develop a comprehensive "three-site-plan" for city-owned parking lots on the west side of downtown, and the council also gave it major responsibility for planning the redevelopment of the old YMCA.  With the DDA's message of more residential density and affordable housing through downtown development, it is not surprising that the council assigned it a strong role in the downtown residential task force.

The greenbelt link

The 2003 greenbelt millage campaign was frankly antidevelopment.  "The beautiful rural landscape just outside town enhances the vibrant quality of life we experience in Ann Arbor," its literature said.  "Uncontrolled sprawl development . . . threatens the high quality of life we enjoy."  The campaign specifically targeted "out-of-town sprawl developers" as the bad guys.

Yet at the same time, some developers and Realators were donating thousands of dollars to the Proposal B campaign McKinley alone donated $11,000.  Meanwhile, a discussion about downtown density was going on in the background of the greenbelt campaign.  In news stories developers described their frustration with the way Ann Arbor's citizen-heavy review process stymied their projects, especially those requiring rezoning.

Developers charged that the greenbelt would simply add barriers to growth.  But some supporters of the greenbelt argued that it would actually help win public acceptance of more urban density.  The Ann Arbor News quoted Mayor Hieftje as saying, "Once there's assurance that some land can be set aside as agricultural or open space, we can redirect development where infrastructure already exists."  Mike Garfield, the cochair of the greenbelt millage campaign, said that once open land was set aside, more dense development could become more palatable for Ann Arborites.  Doug Kelbaugh, dean of the U-M's college of architecture and urban planning, later declared publicly that Ann Arbor has a "moral obligation" to accept its share of the region's growth.  (Kelbaugh now says that he might better have described it as a "civic obligation.")

But Doug Cowherd, the originator of the greenbelt campaign, denies that there was any linkage with downtown density.  He says that notion is being circulated by "a handful of developers and their political allies."  Other advocates also say that their support for the greenbelt did not imply any acceptance of greater downtown density.  "I think folks voted for a 'greenbelt,' period, and not for density -- look at the language on the ballot," says environmental activist Gwen Nysten.  Neighborhood activist Dave Cahill agrees:  "There was nothing on the ballot about downtown density.  In fact, the campaign was anti-development.  Who can forget the 'Big Developers Cry BOO on B' postcard with a picture of a bulldozer?"

Susan Pollay, the executive director of the DDA, acknowledges that downtown density was not included in the ballot language, but she says she had always assumed that the two were connected.  She points to Portland, Oregon, where a growth  boundary has led to high urban density and transit-friendly design.  And Ray Detter, who heads the DDA's citizen advisory council, says that his group also assumed the greenbelt would encourage more building downtown.  "You have to provide people with alternatives," Detter says.  "We desired it [the greenbelt] because it would encourage downtown density.

Whether or not voters saw the link, there's no question that downtown density was on the table as city council when it created the downtown residential task force.  The group's charge was "to explore the barriers to development and the opportunities to increase the number of downtown residences."  Its members included three developers, two of them DDA members; two city council representatives; one planning commissioner; the mayor's assistant, and Doug Kelbaugh.

The DRTF delivered its report to council in June 2004.  It begins with the assumption that increased density in the downtown is an obvious good.  In this it reflects the views of Kelbaugh, who has expressed an almost utopian vision of the benefits of New Urbanism.  Concerned with the environmental impact of an automobile-based culture and its impact on social equity, he believes that transit-based, walkable urban environments are inherently desirable.

Mayor Hieftje also holds up the vision of the walkable, transit-friendly city and repeatedly speaks of the need to maintain a "vibrant" downtown.  He defines this as what we currently enjoy on Main Street and State Street, where rather than being isolated in automobiles, people are walking, biking, and actively engaging one another in conversation.

"We don't want to go back to the nineteen-seventies, when downtown almost died," Hieftje says.  "We can't stand in place.  There are new threats out there, like lifestyle malls."  Many on the DRTF and the DDA have stressed the importance of downtown residents to support local business.  And beneath the hopes and fears lie some more basic motivations:  development expands the city tax base, and the city has successfully pressured many developers to help pay for subsidized housing.  Advocates also hope that adding units downtown will result in a trickle-down effect of more affordable housing for all.

The task force recommended that the city subsidize development of housing downtown, either through a millage (an idea that was quickly rejected) or by forgiving fees.  It recommended streamlining the approvals process.  At the suggestion of Fred Beal, one of the developers on the committee, it set numerical goals:  1,000 new housing units in the downtown by 2015 and 2,500 total by 2030.  It recommended dense development on city-owned property (hence the three-site plan).  But the recommendation that carried the most punch was to rezone most of downtown to permit bigger buildings.  "In general, it is the intent . . . to allow for substantially greater height and density in the downtown areas." the report said.  It suggested allowing buildings of eight to fifteen stories, depending on conditions.

Talk of buildings that tall might have shocked council members only a few years ago.  But lately they have shown a willingness to approve taller buildings in spite of public protest, such as the eight-story Corner House Apartments and a proposed ten-story building at Glen and Ann.  In recent DDA committee meetings, council reps and DDA members have seemed to have an almost giddy sense that the brakes are off.  When staff suggested a six-to-eight-story building on the site of the closed Washington-First parking structure, council rep Chris Easthope pushed them to make it eight to ten stories, joking, "I'll take the bullet with the Fifth Ward on this one."

But not everyone shares the assumption that downtown density is an obvious good.  At a public hearing on the DRTF report in April 2004, "I don't recall anyone that was enthusiastic about it." says Pat Ryan, a longtime neighborhood activist who attended the hearing.  "The prospect of transforming downtown to accommodate many more residents didn't appeal to people.  They [the DRTF] came here to do something that this community was not ready to do and perhaps never will be ready to do."  Clearly, the downtown development advocates had some selling to do.

Elusive consensus

City council officially received the task force report in June 2004.  That December it directed the DDA, the planning commission, and the city departments to take steps to implement the report.  Jean Carlberg, a council rep who also sits on the planning commission, says part of the reason for the delay was that the planning staff  were not able to handle the tasks  required.  (The planning department was undergoing reorganization at the time, with the planning director, Karen Popek Hart, leaving and the new manager, Mark Lloyd, just beginning work in September.)  But even more, she says that it was clear that these changes would require a wider community discussion.

In May council hired California-based Calthorpe Associates to facilitate that discussion.  The firm's founder, Peter Calthorpe, is an internationally recognized authority on urban planning and New Urbanism.  The real work here, however, was to be done by Calthorpe's associate, Joseph (Joey) Scanga.  Scanga's mission was to recommend changes to the downtown zoning map to facilitate density -- and to do it with public concensus.

Scanga had his work cut out for him.  It was clear that the objective was the denser, higher downtown advanced by DRTF.  At the first public workshop in July, for example, facilitators were instructed that "tables are not given the 'no growth' option."  Instead, participants were asked to choose between development according to the current zoning (which Scanga said would permit 575 new residential units) or more liberal rules that would permit 1,000 or 2,500 new units.

But neither Scanga nor the city council was prepared for the independence and irreverence of the Ann Arbor body politic.  While many of the tables selected the densest option, their comments often told another story.  "We weren't sure we wanted to live in this city when we were done," reported Sabra Briere for her table.  And the crowd absolutely refused to follow the rules.  Participants were given chips representing precise square footages and uses, which they were supposed to paste neatly into place on maps of the downtown.  Instead, many cut up green paper and pasted it all over the maps to represent new urban parks, including pocket parks, fountains, and even a park with an amphitheater on the Brown Block parking lot on Huron.  Several proposed submerging a major street (Huron, Liberty, or Washington) to make a green pedestrian walkway.  Extra green paper was glued on the tops of most tall buildings, to indicate green roofs or rooftop parks.  And every table showed a vivid green stripe along the course of Allen Creek and the Ann Arbor Railroad -- the disputed greenway.

Stunned, Scanga mused aloud about his choice of planning as a career -- and said he had "no clue" how he was going to sum the session up.  But at his recommendation, council hastily appointed a greenway task force, chaired by local landscape architect Peter Pollack, to articulate some plans.  A concept paper prepared by the task force calls for a greenway to follow the Allen Creek floodplain "and its watershed."  (The task force's final recommendation is not due until October 2006.)  In subsequent workshops, Scanga's maps showed the area along the buried creek as a low-density zone.

The second workshop was even more farcical, with participants branching out into pure fantasy but still with plenty of green paper.  Ideas included linking downtown buildings with "flying" green roofs, a museum (subject not specified) on Huron, a grocery on the old YMCA site (already committed to a housing development), a streetcar down Huron, a city hall with retail shops on the ground floor, and a trolley running from Argo Pond to Briarwood.

The conceptual plan unveiled as the third workshop on November 3 will form the basis for Scanga's recommendation to council, which is due on December 5.  Currently, downtown is a zoning patchwork, with parcels and buildings zoned for very different uses right next to each other.  The DRTF recommended having only two downtown zones.  Scanga's conceptual plan calls for six, arranged by height -- the tallest buildings would be allowed in the central downtown (along Huron, for example) -- with heights "feathered" down to the edges of the surrounding residential neighborhoods.  Mayor Hieftje and planning commission chair Jennifer Santi Hall have both expressed support for simplified zoning classifications.  Hall is particularly keen to eliminate the need for rezoning, a time-consuming and uncertain process, especially for planned unit developments (PUDs), in which the city and developer negotiate what amounts to a unique zoning ordinance for the site.  Planning manager Mark Lloyd says many developers decide to seek PUDs for flexibility.  But Hall says that PUDs also extend the time it takes for review a project, and force developers to make concessions.  Rick Hills, a U-M law professor who presented a lecture on zoning as part of the public discussion on the downtown, says that the recent trend in zoning practice is toward transparency, where a set of rules is plainly set forth and developers who follow those rules can develop by right -- without negotiation.  Hall says she is a big fan of this transparency.  But Hills also cautions that the type of zoning that involves negotiation -- like PUDs -- is the only way cities can get concessions they want.  Making zoning by right deprives cities of a potent tool.  This has certainly been the case for Ann Arbor, where the city has extracted substantial contributions for affordable housing from developers in the PUD process under the "public benefit" clause.

Council rep and planning commissioner Jean Carlberg is concerned about losing the ability to require these contributions.  She says that council has communicated this concern to Scanga, and has asked that his new zoning plan retain some flexibility for the city in dealing with developers.

The greenway remains a big question.  Although the public workshops revealed a lot of support for the idea, density advocates show limited enthusiasm for it.  (Hieftje likes to point out that the city already has a greenway, along the Huron River.)  But Doug Cowherd demonstrated the power of the idea last spring, when he was able to fuse Old West Side neighborhoods concerns, Allen Creek floodway issues, and the drive for parks and green spaces downtown to block plans to build a parking structure at First and William.  "The downtown area has only a token amount of parks -- it is the biggest weakness in our park system," Cowherd argues.  "If we ever hope to attract a meaningful number of people to live downtown, we will have to provide green space to draw them there."

Will it sell?

No matter what zoning changes the city makes, developers will build housing only if it makes economic sense.  According to Dena Belzer, a consultant to Calthorpe, most new condos downtown are priced at around $400,000 -- out of reach of about three-quarters of the city's households.  The stiff price tag reflects not only the high costs of land but also such considerations as the need to provide parking, tradeoffs and allowances associated with PUD zoning, staging problems, and the need to retrofit utilities.  The DDA recently estimated that it would cost $300 per square foot to build condominiums on the site of the old parking structure at First and Washington, not including either land costs or the cost of parking.  So even a 1,000-square-foot apartment will cost $300,000 just to construct -- already beyond the reach of most of the young professionals who have been described as a target group.

With the economics of market-rate housing marginal, affordable housing is virtually impossible.  A local family of two earning $37,000 yearly can afford to pay only $75,000 for a home.  Yet at $300 a square foot, even a 650-square-foot, efficiency would cost $195,000.  To make it affordable, most of the price would have to be subsidized.  Jean Carlberg says that projects can run into problem with their bank financing if they do not show profitability of 10 to 15 percent -- and with the high cost of building downtown, even buildings of ten stories may not be profitable enough to subsidize many affordable units.  Consequently, Carlberg is pessimistic that any significant amount of affordable housing can be built downtown.  The city council quietly agreed last year, when it passed a resolution allowing developers to make a contribution to the affordable-housing fund in lieu of providing affordable housing within their projects.

With all of this, city council members have one more decision.  Have they really resolved the differences and the culture clash between the density advocates and the merry citizens of Ann Arbor who applied all that green construction paper?  Will the Ann Arbor voting public really support the kinds of actions needed and the consequences of forging ahead to a taller, denser downtown?

At a joint session with council, DD, and the planning commission, Russ Collins, a DDA member who is the executive director of the Michigan Theater and a dedicated urbanist, scoffed at the notion of green space downtown, calling it "suburban."   In his vision, Ann Arbor's future lies in creating an exciting twenty-four-hour urban environment.  Conan Smith, who chaired Ann Arbor's "cool cities taskforce," agrees that younger professionals are looking for that -- but adds that many members of the creative class are also family people who want to live in a neighborhood with space for their kids to play in and access to recreational amenities.  They have a strong outdoor ethic.

Many density advocates sneer at their opponents' NIMBY ("not in my backyard") mindset.  But Julie Weatherbee, a U-M information technology specialist who lives near downtown on South Main Street, defends the neighborhood perspective.  "Of course people want to protect their quality of life.  The City and developers love to look at any opposition of a project as unfounded NIMBYism, but the truth is, the people who live in an area know the most about the area.  Take the 828 Greene Street project in my neighborhood.  We went to the planning commission and city council and said, 'There are sewer problems, flooding problems, parking problems, and lots of vacant apartments already in our neighborhood,' and everyone cried NIMBY and said we just didn't want an apartment there.  But all of our concerns were real and based on many years of experience.  So council went ahead and approved a building that we know will have problems.  Which is the stronger motivation here -- greed or NIMBYism?"

The DRTF report identifies a "not-in-my-backyard community sentiment that is supported by planning and council representatives" as a barrier to more downtown housing, and suggests that "a quicker, better coordinated, more certain development review process could reduce development costs throughout the city."  It recommends setting time benchmarks for approval of projects, and reducing the regulatory hurdles often used by neighborhood groups in opposing projects.

The prospect of such far-reaching changes has both proponents and opponents looking anxiously toward December 5, when Calthorpe's report reaches the council.  Proponents hope council will approve simplified zoning and a speedier review process that will clear the way for a new generation of residential buildings downtown.  And that's exactly what opponents fear.

In some ways, the name of a bakery on Miller says it all -- "Big City, Small World."  City council will be called on for some real statesmanship to keep both.