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How Much “Fire, Ready, Aim” Leadership Cost Taxpayers This Time

by P.D. Lesko

The University of Michigan picked up its marbles and is going home. Officials there are now looking to build the U.’s next parking garage anywhere but on a 10 acre parcel of riverside parkland on Fuller Road. While the U walks away having shelled out relatively little money, Ann Arbor taxpayers are out over $4 million dollars thanks to a poorly negotiated, one-sided agreement between the University and the city championed by two former Council members (Greden and Rapundalo) and John Hieftje.

If comments on AnnArbor.com are any indication, city residents are aware that the project was a terrible deal for taxpayers. The most popular comment in response to a recent piece about the Fuller Road fiasco states: “People should begin demanding a full accounting of every dime that has been spent on this project, INCLUDING things that they said ‘needed to be done anyway,’ but were clearly for the new station. It is well over multiple millions. This has gone beyond mismanagement; this is dishonesty and criminal negligence.”

Second Ward Council member Jane Lumm recently compared the Hieftje administration’s expenditure of millions on the Fuller Road parking garage project as “fire, aim, ready” leadership. It was reported that Third Ward Council member Christopher Taylor took umbrage at Lumm’s characterization. Of course, Taylor was the Council member who published an open letter on city finances in AnnArbor.com in which he understated city debt by $215,000,000. Taylor handles facts like Elmer Fudd hunts rabbit.

It has been rumored for months that officials at the University of Michigan had little confidence in John Hieftje’s ability to deliver a parking garage to them on a parcel of parkland that abuts the Huron River and Fuller Road, near the University Hospital complex. Hieftje claimed in a press release distributed by city officials that the unpopularity of the project among the citizenry had nothing to do with U of M’s decision to “look elsewhere” for a place to build its parking garage.

A university official who asked not to be identified was more candid: “This project is incredibly unpopular—just look at the comments on AnnArbor.com. That’s not the entire reason we decided to step back, but coupled with the election of Jane Lumm, we certainly began to have second thoughts. We’ve decided to explore other options. The Wall Street area was always an option, even as we pursued Fuller Road. The Memorandum never ruled that out.”

The Memorandum of Understanding (MOU) between the City and U of M for the construction of a parking garage on the riverfront parcel of parkland, as opposed to on Wall Street, where the Kellogg Eye Center is located, states that the university is “willing to suspend at this time its pursuit if structured parking on Wall Street as presently authorized and programmed.”

Thus far, according to an August 2011 piece posted to AnnArbor.com, taxpayers have been soaked for over $4 million dollars for the aborted parking garage that was sold to the Council and public as an eventual train station. The MOU includes the claim that commuter train service was set to “start in 2010.” That was a complete falsehood perpetuated by Hieftje; there was never adequate money committed by either state or federal government to cover the operating costs of any commuter train project, or the costs of any train station.

Hieftje’s $4 million dollar Folly began in 2008, when Hieftje and First Ward Council member Sabra Briere got the ball rolling. They co-sponsored a  “Resolution Calling for Increased Cooperation between the City and the University of Michigan in Planning for Redevelopment of the Wall Street Area” between the City of Ann Arbor and the University of Michigan. Briere, no doubt was just happy to have been included by the notoriously stingy Hieftje—who is known for refusing to allow Council colleagues to co-sponsor resolutions he brings forward.

It’s probable that Briere had no idea that she was setting into motion a multi-million dollar diversion of tax funds to a boondoggle. However, it was a diversion of funds that resulted in cuts to police, fire, parks and other city services.

Why was Hieftje so intent on siphoning taxpayer away from services to spend on a parking garage for the University of Michigan?

Until 2011, Hieftje (who holds a bachelor’s degree from EMU) was paid a $90,000+ pro-rata salary by the University of Michigan to teach at the Gerald R. Ford School of Public Policy. He was hired and given that salary by Dr. Paul Courant, who subsequently provided handy political endorsements to Hieftje each year praising Hieftje’s handling of city finances—without mentioning the two men worked together.

Hieftje was the sole sponsor of another resolution in 2008. It was an amendment to the City’s Charter calling for a public vote before the sale of any parkland. That Charter amendment contained a giant loophole: it did not call for a public vote when leasing parkland. Though this was pointed out to Briere and several other Council members, Council passed the proposed resolution unanimously, and voters passed it handily when they went to the polls, confident that Ann Arbor’s 2,000 acres of parkland would be safe from development.

Oops.

In 2008, officials from the University announced that they would explore building two parking garage towers in the middle of a residential neighborhood on Wall Street—albeit a neighborhood that has become increasingly commercialized over the past decade. The uproar was loud and predictable.

Hieftje and Briere rode to the rescue with their Resolution of Cooperation. Hieftje then proposed a Charter Amendment to “protect” parkland from sale. It was a clever way to deceive the public into believing that parkland would be safe from development, and more “green cred” for Hieftje.

One year later, in 2009, now former Council members Leigh Greden and Stephen Rapundalo, along with John Hieftje, offered up a Memorandum of Understanding between the City and U of M that proposed leasing  a parcel of river front parkland to U of M for a parking garage. U of M agreed to set aside plans to build on Wall Street and, instead, kindly agreed to put a 977-space tower on a parcel of land valued at $4-$10 million dollars abutting the Huron River.

The proposed annual rent set out in Hieftje-Greden-Rapundalo MOU was $24,846 per year, with an annual 3 percent increase. This infuriated members of the Parks Advisory Commission. The proposed deal meant lost revenues. At the moment, U of M pays Ann Arbor $69,552 for daytime use of about 600 parking spaces in Fuller Park. Hieftje and his Hive Mind Collective on Council were pushing a 977-space city-owned parking garage, on city parkland for which the University of Michigan would pay only $24,846 per year to lease, plus other incidental expenses.

The Fuller Road Parking Garage was classic Hieftje administration “fire, ready, aim” wizardry. He and his Council supporters (all but Ward 5 Council member Mike Anglin voted in favor of the project in November 2009) were prepared to soak taxpayers for more than $44,000 annually in lost rental income, or $3.6 million dollars over the course of the proposed lease.

The University’s withdrawl from the Fuller Road deal is not only a political body blow to an increasingly embattled Mayor and Council, but more so to the taxpayers who lost $4 million dollars, police, firefighters and saw taxes and fees increases to fund the ill-conceived Fuller Road. It is also a disappointment to those in favor of alternative transportation in general and rail, in particular.

As he has continued to do for the past three years, Hieftje claims money for a train station on Fuller Road is just around the corner. In an open letter in support of the Fuller Road parking garage to AnnArbor.com, Hieftje pointed to a letter written by Amtrak officials in support of the project. Emails released in response to an October 2011 Freedom of Information Act request, however, reveal that city staffer Eli Cooper asked local Amtrak officials to draft a letter and then to send it to Hieftje so that he could draft the final version of Amtrak’s letter of support—a letter which was then mailed to Council members with nary a word about the mayor’s editorial input. 

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Short URL: http://www.a2politico.com/?p=13159

3 Comments for “How Much “Fire, Ready, Aim” Leadership Cost Taxpayers This Time”

  1. @dave, Rita Mitchell adds up the expenditures thus far in her piece, to which we link in this sentence: “Thus far, according to an August 2011 piece posted to AnnArbor.com, taxpayers have been soaked for over $4 million dollars for the aborted parking garage that was sold to the Council and public as an eventual train station.” Have a look. The money includes consultants, improvements to the area, etc…It does not include staff time devoted to the project which would, of course, add more to the bottom line.

  2. Please explain the expenditure of $4 Million. I didn’t see it in there.

  3. Thanks for another interesting article. It is easy to claim that the Mayor and Council engage in “Fire, Ready, Aim” process. It is something else to actually describe the manner in which they should pursued such projects.

    Let’s look at what the City could have done with their plans for the Fuller Road parkland.

    1. Identify the goal.
    2. Assess the value of the property.
    3. Decide whether to trade or sell the land.
    4. Negotiate with the University.
    5. Seek approval of the voters.
    6. Conclude the sale or transfer.

    The City appears to have wanted to avoid the development of parking structures on Wall Street. Clearly, the Fuller Road location was a better site for the parking lot because it would have been within walking distance of the hospital and would not require additional transit services. Pretending that a train station or bike station had anything to do with the parking structure plan was disingenuous and undermines the City’s credibility with residents.

    Had the City placed a real value on the land, it could then have offered discounts in exchange for actual concessions from the University. For example, the City could have discounted the price a bit in exchange for a binding promise not to build structures on Wall Street during the useful life of the Full Road structure. Or, the City could have reduced the price in exchange for access to some parking. Instead, the City all but offered to give the property to the University and offered to help pay for the construction of the parking structure.

    Alternatively, armed with an actual assessment, the City could have discussed trading this parcel for other river front land. Much of the discontent about this plan arose from the precedent it would create regarding the re-purposing of park land. If the City trusted its voters, it could have proposed trading this property for something of equal value on the river for use as a park.

    Knowing the value of the land would have permitted the City to engage in good faith negotiations with the University. Unfortunately, the City was trying to negotiate with the University while it was trying avoiding the will of the voters. This was unfair to the University and the taxpayers. The University had every reason to believe that it was dealing with an honest broker while the City was trying desperately to convince taxpayers that the project was something more grand than a parking structure. Years and millions of dollars into the project, it collapsed under the weight of the hubris.

    The real failure of the “Fire, Ready, Aim” method is the lack of leadership. The Council seems afraid to ask the voters for permission to do what the City thinks is the right thing to do. Do they think they know better than the voters? The disconnect between Council and the voters is based in a lack of trust. The Council does not trust the voters to make decisions. The voters distrust the City because they have seen Council repeatedly try to circumvent their constituents.

    The City often claims that seeking voter approval is too time consuming. Had the City put Fuller Road on the ballot a year ago, the University would have gotten a clear answer long before the recent announcement of the City’s failure to deliver on its promises.

    A city ordinance requires a vote to sell park land. That does not mean that the City shouldn’t seek voter approval for leases, giveaways or other re-purposing of park land. A vote on the sale of park land is the absolute minimum required by ordinance. Real leaders would not be afraid to seek voter input even where it is not required.

    Fuller Road is just the most recent failure of political leadership. The same process caused the Huron Hills Golf Course debacle and the library lot conference center folly. Next up in this procession of failed projects is the four party transit plan. The city appointed AATA has asked residents what transit service they would enjoy but have failed to ask what transit they are willing to pay for. We also can expect that the city appointed DDA will soon offer ideas for developing city-owned, downtown properties without identifying the property values, seeking the input of those who might disagree or weighing the likelihood of success of any particular project.

    Continually resorting to the same failed process will deliver the same unfortunate results. The City must try to develop trust so that it need not fear the voters. Absent a dramatic change in process, we will continue to waste time and money.

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