The Politics of the DDA: Time to Clean House

Rene Greff and Jennifer Santi Hall are spilling the beans about the down and dirty inner-workings of the Downtown Development Authority to Ann Arborites, and anyone else who would care to know. At the most recent DDA meeting, at which Russ CollinsLeah GunnRoger Hewitt, Mayor John HieftjeJoan LowensteinJohn Splitt, and City Council Member Sandi Smith supported siphoning off $2 million to prop up the city’s leaky bucket of a budget, Santi Hall alleged “secret” back room wheeling and dealing. She is quoted in a May 5, 2010 post to Ann Arbor.com as saying:

DDA board members and Ann Arbor City Council members who worked out the framework for the $2 million transfer behind closed doors during the last year. Hall said the meetings of the working group should have been open to the public, but even some DDA board members were kept away from sitting in on the discussions. “I don’t support this type of conduct,” Hall said. “I find it sneaky, and underhanded, and corrupt, and possibly illegal, and in violation of the public trust in our government. Obviously not everyone is in agreement with me on this or things would have happened in a different way. But at the very least you should be able to understand why I’m so angry today.”

Not to be overly cynical, but I have to wonder if Hall was present at the January 20, 2009 meeting called by First Ward Council member Sandi Smith. It was revealed in FOIAed emails that Smith had invited everyone on Council over to the DDA office to discuss what should be built atop the underground parking garage planned for the Library lot. This was, of course, seven months before July 2009, when City Council actually issued the RFP to solicit proposals from developers interested in building atop the Fifth Avenue parcel. There was no public notice of the January 20, 2009 meeting, nor were minutes kept. Just City Council and DDA Board members alone in a room deciding what should be built on land owned by the public. If Jennifer Hall was at that meeting, her outrage at the behavior of her colleagues and City Council members over being excluded from meetings concerning the ultimate disposition of the $2 million dollars requested by the city from the DDA, seems somewhat staged. Then again, if she wasn’t at the January 20, 2009 meeting called by Smith, the outrage seems somewhat puzzling. 

The DDA only posted its annual budget to its web site in 2008. While running against Sandi Smith for the First Ward City Council seat (Jennifer Santi Hall was Smith’s campaign manager), I questioned why the DDA’s financial information wasn’t readily available online, and why the noon-time meetings weren’t televised. In the midst of that election season, the annual budget was posted to the group’s web site in .pdf format. DDA meetings have only just begun being televised. These were two very important steps toward transparency, and I’m delighted I helped bring them about. However, surely Santi Hall knew that the DDA Board members cut a $10 million dollar back-room deal with former Council members Leigh Greden and Christopher Easthope in exchange for Main Street beat cops for a decade (a promise that the City Council broke after taking the DDA’s money), according to Rene Greff, in an October 2009 interview she did for A2Politico.

Thus, the current ruckus over how, when and by whom it was decided that the DDA would hand over $2 million dollars to the city with no strings attached demonstrates quite amply that the politicization of the group as evidenced by changes to its mission in the DDA’s 2003-2033 early renewal, has worked against its initial mission, tending to Ann Arbor’s downtown. The DDA’s renewal includes the following objective areas:

Business Encouragement
Development Partnerships
Community Services

All are laudable goals, of course, but most involve influencing or changing the course of the city’s public policy. That’s the job of our elected officials. In other towns, including Royal Oak, the budgets of their DDA’s must be approved by elected officials. Ours is not. In fact, First Ward Council member Sandi Smith has argued that the City Council has no business sticking its collective nose in DDA parking policy, and members of the DDA Board have argued that the entity is autonomous. Jennifer Hall, in her interview with A2Politico said that: “I wish Council provided the kind of oversight, check and balance that an independent agency such as the DDA (or AATA or any other authority) should have.  But they don’t always do that.  They don’t really look into our bylaws and make sure that we aren’t abusing our power.” 

The DDA Board is abusing its power. The Board recently voted to expand its own state-mandated boundary so as to be able to give a $500,000 tax dollar giveaway to the Near North project, located outside the long-established DDA boundary. Then there is the recent $2 million dollar giveaway to the city of Ann Arbor. County officials are investigating the legality of that transfer, because it involves tax capture money that would, otherwise, go into Washtenaw County coffers. The DDA Board recently cost the taxpayers $500,000 when the project manager it chose to oversee the construction of the underground parking garage awarded a $22 million dollar contract to its own subsidiary. The Christman subsidiary bid was $500,000 higher than the lowest bidder. This prompted an editorial in the AnnArbor.com titled “Concrete deal for DDA underground parking structure a bad deal for taxpayers.” In that editorial, Tony Dearing writes:

“It looks bad and raises serious questions when a company managing construction of a major public project rejects a lower bid from a competitor and awards the work to its subsidiary….We have spoken to many experts who find it hard to believe that a public entity would allow such an outcome, but this now appears to be a done deal. Because of the DDA’s autonomy on this project, we are not aware of any other entity that has the ability to step in after the fact and give this questionable bid award the level of review or scrutiny that the DDA failed to provide.”

But there is an entity that can step in: City Council. Just as the group recently dismissed the entire Housing Commission Board, the City Council could vote to dismiss the entire DDA Board, and direct the newly appointed replacements to suspend the Christman contract, and give the questionable bid award the scrutiny the previous DDA Board obviously failed to provide.

Though this is the obvious solution to the DDA’s failure to act in the best interests of the taxpayers whose money they have access to through the TIF capture, it won’t happen as long as the incumbent remains in office. Why? Because over the past half a dozen years, the DDA Board has been stacked with friends, donors and political pals. It’s tough to tell a group of people whose combined donations during your last campaign totaled close to 25 percent of the donations you took in, that their services are no longer needed because, well, they cost the taxpayers half a million dollars. 

That’s why Mayoral appointments of friends, political pals and donors to city boards and commissions has to end. In addition, there are members of city boards and commissions who have overstayed their welcome. 

For instance, County Commissioner Leah Gunn has served far too many terms on the DDA, having been appointed when George H.W. Bush was president. The quality of her recent work shows why she is no longer an asset, and a look at the Mayor’s 2008 campaign finance forms will make clear exactly why he will never replace her. She has donated thousands in in-kind goods, services and monetary donations to his campaigns over the past half a dozen years.

To justify the $2.28 million dollar purchase of additional parking kiosks, Gunn went before the DDA Board and gave the jolly explanation that they should pony up the money for the detestable and over-priced kiosks because, “We have found that everybody likes them.” How she knew that for a fact remains a mystery, as the DDA conducted no user study, and Gunn’s colleagues neglected to stop for a moment before writing the check to enquire just how she came to that blowsy conclusion. Then, on May 8, 2010, she was quoted in AnnArbor.com as saying that a proposal to use DDA money to return the Beat Cops to Main Street:  “…needs…a lot of homework done. There’s a lot of data that needs to be collected and a great deal of discussion that needs to be held.”

Seriously? With six police officers patrolling all of Ann Arbor on any given morning she thinks returning the Beat Cops to Main Street needs lots of data collected and a great deal of discussion? As you can imagine, she found support from Mayor Hieftje. He called the proposal to fund beat cops on Main Street “premature,” and said “beat cops might not be the best way to police downtown.” I’m not sure what he thinks might be the best way to police downtown, but at the moment whatever it is it involves cutting more police to fund a parking garage on Fuller Road for his friends at the University of Michigan, and to pay for cost over-runs on the price-“guaranteed” Police-Court facilty. Those cost over-runs have cropped up in the 2010-2011 proposed budget. Suddenly, the “guaranteed” cost of that capital project is, well, is fungible, as they like to say on Council.

Every Main Street business owner whom I’ve spoken to wants that police protection back. In October of 2009, just three months after Council adopted a budget that cut Beat Cops from downtown, the Chief of Police went down to the Main Street Area Association and offered to return the Beat Cops in a pay-for-policing offer. I wrote about that here. Was Chief Barnett Jones just trying to up sell our Main Street Merchants police coverage like so many matching handbags, police protection they didn’t need? I doubt it. Here’s a better question: Should the appointed officials on the DDA Board be deciding whether Ann Arbor’s downtown needs police protection? Absolutely not.

City Administrator Roger Fraser suggested in December of 2009 that we dissolve the DDA in order to return some $2.4 million dollars per year to our city’s General Fund. If elected, I want to actively pursue Roger Fraser’s suggestion. Until then, I think it’s time for the DDA to immediately make as much of its financial information available online as possible. That information should include previous year’s budgets going back to 2000, parking data, monthly budget statements, quarterly budget statements, audits, and the DDA’s check register. 

Appointed officials have no business dictating police coverage, wasting half a million dollars of taxpayers’ money through lack of oversight of a contractor, extending their own boundary as they see fit so as to facilitate tax giveaways to private developers partnered conveniently with local non-profits. Appointed officials and elected officials on the DDA Board have no business holding “work sessions” so that their decisions can be formulated out of the public eye, and away from the coverage of the local press. Our DDA’s appointed officials have no business setting transportation policy, housing policy, or spending parking/tax dollars on private developments. Subverting the Open Meetings Act simply makes the public more wary and mistrustful of whatever good deeds such an entity could (and does) accomplish.

Be that as it may, public money must be controlled by elected officials, not appointed ones. It’s time to clean house at the DDA through Mayoral appointments made not as recompense for political support, but rather for the good of the downtown and in support of our local merchants. I agree with Roger Fraser that we have to reassess whether the entity should exist in its current form, or dissolve the DDA and form an Advisory Commission with absolutely no access to public money. We’ll lose the TIF capture, but that money will go back to the city’s coffers, county’s coffers, schools and libraries, institutions that service the entire community.

Finally, and most importantly, the contract between the city and the DDA that established the DDA as the entity that oversees our parking program should be bid out competitively. Until we make parking revenue neutral, alternative/mass transportation programs and initiatives in Ann Arbor will remain political step-children dragged out every election season to be used as bullet points on political web sites

Ann Arbor taxpayers deserve accountability, and in the case of the DDA, and every other board and commission in Ann Arbor, the City Charter provides City Council with the mechanism to make sure the members of boards and commissions are held accountable. Whether Mayor and Council will continue to appoint friends, donors and political pals to our city’s boards and commissions, or choose to give the taxpayers in the fifth largest city in Michigan the accountability they deserve is another matter that will be decided August 3rd.

Short URL: http://www.a2politico.com/?p=3516

16 Comments for “The Politics of the DDA: Time to Clean House”

  1. Well said Vivienne. Several years ago on Ward Talk, Mayor Hieftje described the DDA as the city’s rich uncle. In the years since that interview, Mayor Hieftje and the current council majority has drained the rich uncle’s cash and piled on debt to pursue pet projects like the new police/courts building and the library lot underground parking garage. The DDA has provided $799,790 in cash for the police/courts project and is providing $508,608 per year toward the debt service through 2038. DDA tax capture money is also paying over $3 million in cash plus another $1.2 million per year in debt service on the library lot project to pay for the cost of pedestrian improvements and future development subsidies for the proposed hotel/conference center.

    The DDA is not free to spend money however it wants. State law limits what they can do. But just as the city has been very aggressive in interpreting what constitutes a by right development, the city is equally aggressive in interpreting the spending limits imposed on the DDA by state law. The thinking seems to be that as long as there is no court case with exactly the same facts that says spending outside the DDA legal boundaries is illegal, anything goes.

  2. I don’t think it is accurate to say that the DDA board voted to expand their boundary. They did vote to fund Near North, but that is consistent with a statement in their charter extension that they might choose to take on projects outside their boundary. These exceptions have most frequently been made to benefit Avalon Housing. At first they were Avalon projects just a few hundred yards or so from the boundary, but the Near North is an egregious example of how this policy can be misapplied. Whether or not housing is part of the DDA’s goals statements, a housing project such a long distance from downtown is very hard to justify according to the original purpose of DDAs generally. Its support appears to be part of an effort to expand the borders of downtown (by bringing in greater density and eliminating single-family residences). What is to keep the DDA from expanding its reach into all types of mayoral agenda items and at all distances from the borders of their district? Already they have committed money to WALLY, not a reasonable downtown issue. These are funds taken from other jurisdictions and from dedicated millages like the Greenbelt and Parks that were approved by the voters with a certain expectation. Essentially the DDA is not even transferring funds from these other entities (like the county, which could use the money) to the city, but also from dedicated programs like park maintenance to other specialized uses unrelated to their original mission. It has become a rogue operation.

    In a sense the problem with the DDA is not the institution itself, but the fact that it has become an arm of Mayor Hieftje’s agenda through selected appointments. Those with independent voices have been let go in favor of appointees who will toe the line or even promote those policies more vigorously. (I was going to write that “independent voices have been stilled, but Rene Greff proves that isn’t quite so!) When I first began to attend DDA meetings in 2005 and 2006, I gained great respect for the institution, its board and its staff. But many responsible board members wee not reappointed and now we see this result.

  3. @11 Poges what a pleasure to hear from you again!

    Your comment left me with a lot to ponder. As I’ve said before, if elected I will continue to blog, but on the city’s web site, like Mayor Dave, of Madison. I like your idea of opening up A2Politico somewhat like the now defunct ArborUpdate, though those discussions were, sometimes, a bit far-ranging. The moderators, however, worked very hard to provide a thought-provoking resource. What I value most about A2Politico (and what I’ve heard others say) is that the relative civility of the discourse is remarkable. The fact that there are folks from across the political spectrum commenting helps bring a variety of perspectives.

    I would, indeed, like to hear from A2P readers how the blog could evolve.

  4. @12 To get a yard sign, email me at pdlesko@yahoo.com and one will be delivered to your home.

  5. I’m Democrat and I would vote for Satan if he ran against Hieftje, regardless of party affiliation. This latest story is the final straw.

    Pat, find a way to let people know how to get yard signs. I will stick one in the lawn of my Ward 2 house.

  6. Pat –

    It’s been sometime since writing – Good work by the way.

    My sincere hope is that the insight of this blog continues in some fashion. The evolution of this site has been a source of mental stimulation often lost in the discussion of local politics.

    Would it be worth speculating that the next steps in the evolution of A2Politico will be an open forum when guest/ghost writers chime in?

    My challenge to the avid readers is to help Pat continue the legacy with fresh ideas and opposing viewpoints. If I don’t miss my guess, Pat would appreciate feedback and opinion that helps her in her future role. The expansion of one’s paradigm to see all points of view and embraces ideas seems to be a hallmark of a the denizens of this website

    See you at the polls.


  7. The Red Hawk and Michigan Theater just both lost my business. Let’s be honest, the DDA exists to provide parking for the guys like Roger Hewitt who own restaurants. The rest of the business folk are left to fend for themselves. Ann Arbor should never have chartered a DDA in the first place. There was no blight. It was a scam to skim plain and simple. The board might have some decent people, but they have gone along with the scams and hieftje’s bright idea to make the DDA his personal slush fund. That DDA money needs to go to keep up the parking garages. I remember the days before the DDA took over the parking structures. #9 I agree that I will miss A2Politico when Pat Lesko crushes John Hieftje in the primary, but I completely agree that she has some great ideas and is a big picture thinker who won’t tolerate the kind of back-room under the table crap that has become business as usual for the people in office now like Teall, Rapundalo, Hieftje and Smith. We’re going to get a lion tamer, and we need one based on what I’ve seen the DDA and Council pull over the past few years.

  8. Are we disenchanted with A2Politico? Hell no. I’m only sorry that it looks like running for office is interfering with her writing. I have spoken to people who read this blog that are torn about voting for her for the simple reason that we’ll lose A2Politico. I miss having daily entries. As for outrage, there’s no need as we have only a few more weeks left before we’ll go to the polls and show our collective displeasure. Ms. Lesko is going to get votes from both sides of the aisle obviously since she is garnering support from both Dems and my people. Her message is playing very well among my neighbors who are absolutely livid about the financial mismanagement that has been going on since John Hieftje was elected. We’ll lose A2Politico and gain what I believe will be a mayor who is absolutely a straight shooter and prepared to clean up the corruption and cronyism that now passes for “politics” in our town.

  9. Help me understand. How is it there is apparent breaking of the trust in our ‘City on the Hill’ A2 of old… yet no outrage!

    1) Is it that ‘we’ are numbed to outrages?

    2) Is it that ‘we’ are disenchanted with Patricia’s blog since she switched to her real name and race, no matter the marvelous and courageous muck raking she is by the way doing on behalf of the good guys, you know, civil rights, democracy, the American way you and me the silent majority, etc ?

    3) None of the above, help me out by filling in here __________________


  10. Alan Goldsmith

    I’m trying not to but I’m beginning to have second thoughts about the Michigan Theater as well as the Red Hawk. I usually frequent Arbor Brewing anyway, but if current board members are going along with for the ride with all this secrecy and borderline nonsense, then it’s a fair question to ask whether this behavior extends to their other public and private business goings on. As for Leah Gunn, I’ve been mostly happy with her as my rep for County Commissioner but her managing the campaign of Marcia Higgins, her undying support of the Mayor and his actions, as well as her votes on the DDA are making me hope she has a primary challenge next go around as well

  11. @4 This blog entry should let you know exactly what I intend to do. No surprises. I believe Alan Levy is quoted in the Observer as saying that he was totally shocked by the dissolution of the Housing Commission on which he sat. So, if I may be so bold, you’re asking a great question, but of the wrong candidate.

  12. It hadn’t occurred to me in a while that Roger Hewitt owns the Red Hawk. I’ve been a regular patron there for years, but no more. What a tool. From now on, when I have the urge for a beer and some pub food, I’m going to Arbor Brewing.

  13. So then, Pat, do you support City Council dissolving the Housing Commission board? Because it struck me as both heavy handed and underhanded. According to the Observer, nobody even bothered to let the chair know in advance what was going to happen, and they appointed someone to “Chair” who just left the city’s employ… If that is the kind of thing you would do as mayor, I would like to know in advance.

  14. The DDA is out of control and the fractures in the unified front they like to present to the public are starting to show. Jennifer Hall has never struck me as a reformer for the simple reason that she was a vocal Hieftje supporter for many years prior to her fall from grace (clever title for the interview you did with her). One imagines that her sudden penchant for the public statement has more to do with the fact that she has been kicked out of the inner circle that she enjoyed being a part of for many years, than her desire to expose the backroom dealings of a group of people who, one imagines, backroom deal on a regular basis. I feel sorry for Jennifer Hall but only to the extent that she is being humiliated in public by her fellow DDA Board members. Roger Hewitt’s response to her outrage was particularly chilling and telling. As for Leah Gunn, I agree that it’s time she was asked to step down. Her comments about downtown policing demonstrate remarkable hubris.

  15. Thank you. Thank you. Thank you. I’m a Main Street merchant and it’s been a nightmare with the current DDA Board appointed by the Mayor. Despite the fact that there are a couple of businessmen on the board they haven’t got any business sense. The Mayor certainly has shown any business sense in the last ten years. I really believe that John Hieftje will go down as the absolute worst mayor Ann Arbor has ever had. I’m not decided about whether the DDA should be dissolved like Fraser suggested, but I like it very much that you are willing to have the discussion.

  16. […] This post was mentioned on Twitter by A2 Politico. A2 Politico said: New Blog Post: The Politics of DDA: Time to Clean House http://www.a2politico.com/?p=3516 […]

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