Planning Commission - Regular Meeting

And welcome to the Tuesday, September 15th, 2026 regular meeting of the Ann Arbor Planning Commission. My name is Donnell Leitch. I'll be chairing tonight's meeting. For detailed information on our meeting procedures, please review the full printed meeting agenda provided at each end of the dais. Manager Kelly, when you're ready, would you please call the roll?

Beth Suny.

Here.

Norton.

lee here weatherby here mills here dish here adams here hammerschmidt here you have a quorum thank you manager kelly may i have a motion to approve tonight's agenda moved by commissioner bassuni seconded by commissioner weatherby All those in favor of the motion, please say aye. Aye. Any opposed? The motion carries. May I have a motion to approve the minutes of the September 1st, 2026 meeting? Yes. Moved by Commissioner Adams, seconded by Councilmember Dish. Is there any discussion of the minutes? All those in favor of the motion, please say aye. Aye. Any opposed? The motion carries. Next up is agenda item number five. We will have reports to the Planning Commission, and we will start, if Councilmember Dish is ready, with a Council report.

I remember that at the last Council meeting, Council approved the final contract for the Klein lot, which you guys would be interested in. I can't remember if we did anything else. So if Mix Kelly remembers, that would be ideal.

On the 9-8 meeting, there was a annexation resolution which passed for 2958 Shady Lane and a first reading of a rezoning for 2080 South State.

Great. Thank you, Council Member Dish. Manager Kelly, do you have a manager's report?

I do. The first of which is to let you know that we have a staff team interviewing three consultants this week for the Unified Development Code update and economic development process improvement. And I would also like to thank the Good Samaritan who turned my wallet into Kahoot's Cafe today when I dropped it on the sidewalk from my pocket. whoever you are, if you're watching planning commission business, thank you. And I would like to draw your attention to a report that is attached to this agenda under the manager report line item, which is an analysis from our newest planner Emma Berger who did some background work we had long been interested in understanding for ourselves and also just because it coincides with us understanding trends over the past several batches of UDC changes and how they have impacted development in Ann Arbor so I will not go through this exhaustively but I do encourage you to look through it At your leisure, I think that one of the biggest takeaways is that since the changes were made in 2022, 56% of projects proposed less parking than would have been required under our old code. So there was a mismatch of market preferences and what we previously required, which was higher than what the market needed. And there's some other helpful charts. There's a listing of some projects which propose zero onsite parking and the associated residential units that were involved with those. There's a breakdown of the different types of projects, whether they are residential, commercial, et cetera. So I... I encourage you to read it. That's the manager report.

Thank you, Manager Kelly. And so just to recap, the report noted since September 2022, 56% of site plans propose less parking than the former minimum. 32% actually proposed more than the old minimum, which is interesting. 12% exactly what the old minimum would have required, and the median was 73 fewer spaces than previously required. So those are good outcomes, I think, to this change in our UDC. So thank you, and thank you, Planenberger, for this report. With that, are there other commissioner officers or commissioner or committee liaisons who have anything to report? Written communications are included in tonight's packet. In order for you to access what we are looking at, you'll need to go to a2gov.legistar.com and then navigate to Calendar. Then select 2026 City Planning Commission. Scroll down to today's date, September 15th, 2026. Click on the agenda, which is linked. And then inside the agenda, all of the attachments for the items that are on our agenda are listed under their headings with a URL to the additional details. With that, we will move on to agenda item number six, public comment. This is an opportunity for individuals to speak up to three minutes on any issue not listed as a public hearing or a dedicated public comment period. We'll first hear from those of you who are present with us in chambers, then we will turn to remote participants. To speak remotely, press star 9 if on phone or use the raise hand feature if on Zoom. For phone access, dial 877-853-5247 and intermeeting ID 977-6634-1226. City staff will identify callers by the last three digits of their phone number or by name for Zoom users. You will hear an announcement when it's your turn to speak. Please move to a quiet area and mute any background sounds. For all participants, whether in chambers or online, please state your name and address at the beginning of your comments. Is there anyone present in chambers who would like to address us at this time? Good evening, Mr. Garber.

Thank you. Same team, Chair Weish and Planning Commission, Ken Garber, 28 Haverhill Court. Because the Lockwood team is here tonight, I'm going to dredge up my grievance over gas heating at the Lockwood Senior Living PUD on Ellsworth, which the city approved in 2021. Lockwood promised in writing an electric building pending MRSA approval, except for the commercial kitchen. That was five days before the council vote, but the building actually ended up with gas boilers for heat. After five years, I should probably just let this go, but Lockwood clearly knows I'm an old guy and keeps sending me these mailers, senior living at its finest, and every time I get one, I get mad again. Long story short, Lockwood needed a Michigan waiver to go electric, and in 2022, Mark Lockwood told you that, quote, the waiver request was submitted and was not approved, end quote. I found this hard to believe, so I FOIA'd MSHDA. The document showed that yes, Lockwood asked for a waiver, but MSHDA did not deny the request. Of the 100 plus pages I received, not one said it had to use gas. Instead, MSHDA's chief architect, in an internal memo, offered to grant the waiver if that was what the city wanted. But Lockwood never followed up, that I can see. So yes, the waiver was not approved, but it wasn't denied either. No final decision was made. Lockwood just dropped it. Mischta later expressed surprise that the building wasn't all-electric, to which Mr. Lockwood replied, Ann Arbor did initially want the all-electric, but they acquiesced to the Mischta design standards and permitted gas, heat, and water, end quote. So Lockwood told Mishta that the gas heat was the city's fault and then told you that it was Mishta's fault. So which is it? Someone made the decision to go with gas. It doesn't look like Mishta did. So I'm probably the only person who still obsesses over all this extra CO2 that's being emitted by that building. Lockwood keeps telling me to just chill out. Autumn is the perfect reminder to slow down and enjoy life. But I'm sorry, I just can't let this one go. Anyway, after I brought this up two years ago at the pre-PUD meeting for 3695 South State, which we'll consider tonight, Commissioner Weiss asked Stephen Dronin about it. I think he's here tonight. Mr. Dronin said, quote, I don't have specific answers on that tonight, but I will get answers, end quote. I followed up immediately that night with an email, including the FOIA documents and the Mark Lockwood electric promise letter. But I never heard back. So it is what it is. And thank you for hearing my comment. Thanks.

Thank you, Mr. Garver. Is there anyone else in chambers who'd like to address us at this time? Manager Kelly, do we have remote participants?

There are no hands raised at this time.

Great. I shall close the public comment period and move us to agenda item number seven, communications from commissioners. Is there any? Commissioner Weatherby. You can do it now. I mean, you have freedom. Don't be coerced by me.

I just, this is kind of related to that, I did go on the tour of Wolverine Village and they have an all electric cafeteria, which is the largest cafeteria in Washtenaw County. And it is all electric and they have a wok that can boil water in 12 seconds. Just a little thing to add to Mr. Garber's comment, probably.

Thank you. Council Member Dish.

I have a question about the report on parking minimums elimination. And it's not a question. It's just maybe it's a confusion. So it is really exciting that 931 fewer parking spots were proposed overall after the code change. Um, it is weird though. I mean, I know there's a difference between percentages and numbers, but 37 post reform projects proposed only 34% of the parking that would have been required under the old code. Given how much parking the old code requires, it's weird to me that it could be cut by 2 thirds and we would still have, I would think that the number of spots that, the number of fewer spots would actually be higher given that we're having a two-thirds cut. Do you see what I mean? And I understand if I just don't understand all the numbers. But I was trying to make sense of those two figures.

I think one thing that perhaps is not – it's shown in a more generalized way is the map of where the site plans are happening. I think that the locations and the ratio of the parking that was provided is heavily influenced by the locations. So if you see there is a huge – uh dense to sparse is the the range and so there's a very big density hot spot around downtown and i think that likely in areas where we had more expensive land that's perhaps probably what those um Sorry, maybe a large part of those 37 projects were clustered in an area with high land value that was walkable and really just needed way, way less parking. So... Yeah, I guess that's my reflection there. I'm not sure if we're having the same conversation. I hope we are.

No, I think this makes sense. And so 37 post-reform projects is some subset. And those 37 post-reform projects proposed dramatically reduced numbers. Yes. And those are probably the ones that are concentrated in downtown. Right. If I'm understanding. Got it.

Yes, because the number of total projects between 2022 and present, or I forget the horizon, I think it's to... I think it would have been to maybe the end of 2025 or some point this year. We get about 60 to 70 development projects a year. So I think that was just like a, and fun fact, you know, of 34 proposed only, or yeah, was it 34? 37.

Yeah, that's exciting. I mean, it's exciting to see, you know, maybe the overall numbers are not the overall number of 931 may not exactly be dramatic, but there's a dramatic change downtown, which also probably means that projects are able to be realized downtown that wouldn't have been financially feasible without this parking minimum reduction. So, yeah.

I'm sure it's a contributing factor in the penciling out of certain projects, absolutely. Thank you.

Thank you, Council Member Dish. Thank you, Manager Kelly. Commissioner Mills.

I was just going to say, thank you for bringing that up. I puzzled over that for a bit. If you look at figure four, those projects that provided less parking, it's actually like 6,400 spaces less. I think that the difference is that there were 30% of projects or something like that that provided more parking. And so they ate into that reduction. It's not just that they provided the same amount of minimum parking that was required, but they provided more. And so rather than being down 6,400 spots, that's why overall among all the projects, you're down only 900 because some offered more and some offered less.

And you're saying that the total less? Is 931. No, no. But the other number that you said? Yeah.

So what figure 4 shows is it only looks at the ones that proposed less parking. Only those 37 projects. And those differences, if you take the old requirements and the number provided, the difference between those is 6,400. OK.

I couldn't understand that one. So thank you for explaining that.

That's what figure four is showing. It took me a minute, too, but that chart really seems to tell the story because that's showing us what we're getting when we legally lifted the requirement. That's the market correcting down and showing us what we got. The other stuff, they would have gone higher anyway. We would have ended up with a lot more parking had we left the minimums in place, I think is another way of saying it.

And I similarly was thinking, what might have happened? How many projects, if we had flipped these minimums into maximums, what might that have looked like? And I think that that gets you, that would have been dramatically different. Because Presumably the market would still not have provided these sixty four hundred and rather than the five thousand extra that were provided in that subset of projects that were allowed back then and still are Allowed to do whatever the market says if we had met capped them at our old minimums It could we would have saved these sixty four hundred but whether that's a good idea or not. Like, I was actually wondering if that's where this memo was going. And I didn't see that in there. It was just like, this is what happened. But I'm, when we come back to think about parking maximums on once upon, like, sometime, I feel like this would be a useful memo.

Yeah, we could even expand on it at that time. I'm sure that it'll be a good background piece when we encounter this conversation in the future.

All right. Thank you, Commissioners Mills, Dish, and Manager Kelly. Any other commissioners? We are still in Agenda Item 7, Communications from Commissioners. Seeing none, let's hear again from Manager Kelly about our public hearing scheduled for the next regular meeting.

So for the October 6, 2026 regular planning commission meeting that is going to be in these chambers at 7 PM, you have four agenda items, two public hearings, and two dedicated public comment items. The first is an amendment to chapter 55, a proposal regarding attainable housing units, which is a petition to amend chapter 55, the unified development code to define and allow up to two attainable housing units on any lot in a residential zoning district by considering amendments to 5.16 use specific standards, section 5.17 area height and placement regulations and section 5.37 definitions. Attainable housing units are proposed to be single family dwellings of 850 square feet or less when one story or 1,250 square feet or less when two stories with reduced building spacing requirements. I will share that this was the petition from the Ann Arbor Community Land Trust to consider adjustments to the UDC for workforce housing. the next public hearing is 530 south division street this is a rezoning with area plan a petition to rezone an 8 500 square foot parcel from r4c to d1 downtown core midtown character with front yard and front yard with a voluntary condition to reduce the maximum height limit from 180 to 65 feet and an area plan demonstrating conceptual development of a future additional duplex building meeting the standards of the proposed zoning designation and then on to dedicated public comment 1000 victor's way atrium south area plan this is a proposed area plan for a future development of a 12-acre site with five apartment buildings including some ground floor retail space a hotel and two parking structures The development may provide up to 985 residential units, 19,550 square feet of retail space, 120 hotel rooms, open space, and 1,180 structured parking spaces to replace the existing office buildings. It is on TC1 Transit Corridor. and finally 2525 in arbor saline road proposed revisions to sp24-0006 and multi-family residential development approved in october of 2025 that require a new site plan for planning commission The revisions include an additional two stories in height for a total of seven stories, a smaller footprint, slightly moving the drive approach on Oak Brook Drive, providing additional surface parking for vehicles and more residential units for a total of 287 units. There are no proposed changes to the approved plans for the driveway off Ann Arbus Lean Road, which is shared with Cranbrook Village. It is located in Ward 4.

Thank you, Manager Kelly. That brings us to agenda item number nine, unfinished business. There is none. On to regular business. 3695 South State Street, SP25-0027, a proposed rezoning from office to plan unit development to construct a four-story building with 66 affordable apartments and 66 surface vehicle parking spaces. It is a 1.43 acre site that is currently vacant and it's located in Ward 4. It is recommended for approval by staff. We'll start with a petitioner presentation. Then we will hear from Planner Malene Cochran with a staff presentation that will be followed by a public hearing. Then I will read the motion. It'll be moved and seconded, and then the Planning Commission will have its discussion on this item. I do believe this is moving on to—is this moving on to Council because there's a PUD? So this is moving on to Council because it is a plan unit development, and the Planning Commission will just be making a recommendation for approval or denial. With that, if the petitioner is ready, please come up. You have 10 minutes. You'll have a green light, which means you're good to go. Yellow means start to wrap it up unless you're in a really good part answering Mr. Garber's question. And then red means stop so that we can move on to the next thing. So good evening.

Perfect. Good evening, commissioners. My name is Steven Drenum with Lockwood Development Company. It's good to see everyone again. I think a lot of you were here for the pre-PUD concept meeting that we brought this forward. So a lot of this is going to be the same, but I'll just kind of walk through and refresh and then answer some of the questions and leave plenty of time. Hopefully, I won't need that full 10 minutes here. So the development itself is, as Commissioner Weish pointed out, 66 units at 3695 South State. So this is on State Street south of 94. So it's a little bit, it's not quite a downtown urban site, but it is still within the city proper. So we try to really make this as urban-ish as we can while still responding to the needs of the market in that area. Lockwood is a local company. We're based out of Southfield. We've been in business in the development side since 1986 as a single-family home builder dating back to the 1940s. So the crux of our business is on the affordable housing and senior housing side of things. We do mixed-income and mixed-use developments as well, but the majority of what we do is all affordable housing. So the site plan itself is an L-shaped building with a central elevator corridor, common features at the corner, and then four floors of residential buildings above. It's a mix of one- and two-bedroom apartments, all of which will be affordable at that 60% of the area median income and below. So when we look at plans, beginning plans, we like to look at what existing plans exist for the community and then try to make sure that what we're doing is in line with those plans. At the time that we started this project, which has been going on for a little bit, the comprehensive plan was not out yet. So we used a lot of the State Street corridor plan as the basis. And then we're pleased to see that a lot of the things in the comprehensive plan were in lockstep with that. So the South Street corridor plan, though a little bit older, really emphasizes the need and desire for a vibrant mix of different uses. It calls out housing and then specifically different types of affordable housing as things that the city would like to see in this corridor. The comprehensive land use plan, which was passed not too long ago, also covers a lot of things that are very specific, not only to the need for this type of product, but also specific locations as well. So it's a little bit difficult to see on here, but our site is indicated by this teeny tiny red circle down at the bottom here. So this is a page out of the plan itself where residents commented on different locations and what they wanted to see and what they thought was appropriate for those areas this location itself is covered by one of the green dots where 79% of residents favored quote building up a lot at this location and then the plan also emphasizes some of the primary goals that are desired to be achieved here things like expediting affordable housing developments limiting standards when housing is reviewed, things like that. So it makes really clear that the need for affordable housing is pretty well recognized throughout the city here. this is another document that we pulled from the the city's website there's the housing needs assessment this is a little bit older as well this goes back to 2020 but it talks about the need for affordable housing and then we go out and get our own market studies done which indicates a very very strong need for affordable housing with the demand being where it is of the 566 existing LIHTC units, so low-income housing tax credit units, in the area, 99.3% of those are occupied. So everything is gone. It's completely full. There's a long wait list for a lot of the developments that are affordable in this area. So of the existing units that are below that 60% AMI, that only makes up 13% of the existing housing stock within Ann Arbor. So then getting to the project itself, this is a closer look at the design and we can zoom in and talk about any specifics that folks are interested in. But we've positioned all the parking back and behind the building. Well, the majority of it. So you would come in off off State Street and have, there's some parking here, but then the majority of it is sitting in the back. Common areas, the gym, the lounge, the leasing offices are in that front corner to give it more of a commercial type feel. And then the residential above. This is a look at the exterior from the State Street view. So we have a blend of different materials here. We have brick, we have fiber cement boards. Every unit has a balcony. It was important to us to have that external outdoor space since it's a pretty compact site and we don't have as much open space as we would prefer to have on sites. We wanted to make sure that everybody had outdoor space of their own. Backside of the building as well. This has changed a little bit as we had to reorient to meet some of the needs of the fire department in terms of getting vehicle large ladder trucks in and out. So we shifted some things around to make sure that we maintained those fire avenues. You can't quite see it on the screen here, but there is an emergency second egress. That's kind of, you kind of see just off the screen here that was important for fire for us to have a way to completely circle the building so that they could get to all sides. We have elevations of all four sides here, so I won't dwell too much on those, but it's a pretty consistent panel of those materials that I mentioned earlier. And then I wanted to highlight some of the benefits of this plan as well. I think I talked quite a bit about the affordable housing. So just to emphasize again, this is 100% affordable housing. Lockwood is a local company committed to the area. I know there were some issues with, it sounds like, some of the gas on a prior development that we can speak to a little bit. But for the most part, we are very committed to our properties. These are to build and hold for the long term. This isn't a flip situation. We did maximize as much outdoor space as possible. This will be a certified green building. So using the national green building standards, this will be silver certified. So that includes things like energy store appliances, LED lights, low flow toilets or low flow plumbing fixtures, added insulation, thicker glass on the windows, things like that. Based on the feedback from the pre-PUD meeting, we did make this an all-electric building. So we've at least locked that in, and I am happy to commit that in a dozen different ways here. So this will be an all-electric building. That has been taken all the way through MSHDA as well, so this is locked in. There is abundant bike parking within the building as well as electric vehicle chargers in the parking lot. So with that, I think I don't have any more to add necessarily. I'll turn it back over and then answer any questions if you'd like.

Yes, thank you so much. Certainly. We'll turn now to a staff presentation by planner Malene Cochran.

Thank you. And thank you to the petitioner for that lovely overview of the project. So I won't be focusing too much on the actual building, but I will go through the overview of the proposed PUD benefits as they relate to the standards of review that are in section 5.29.11.F of the Unified Development Code. So I'm just going to share my screen so that you can see those with me. So there are eight standards. The first one is that, well, first I'll say overall staff finds that the supplemental regulations that are proposed and are included in the packet and the site plan meet the intent of the PUD zoning district. And I'll go through all of those. You can also see the attached supplemental regulations, specifically section three for the purported beneficial effects of the proposed PUD and section four for the regulation. So those are in the packet. All right, standard number one, that the PUD has a beneficial effect for the city on present and potential surrounding land uses. And I'll note that increased housing supply, especially designated affordable housing, is a priority for the city and is an explicit purpose of the PUD district. The proposed PUD here has a minimum of 66 designated affordable units. And additionally, the PUD will advance the A20 plan for carbon neutrality by guaranteeing a fully electric building, and we'll have that national green building standard silver certification. Number two, the beneficial effect could not be achieved under any other zoning classification, and there is an alternative zoning analysis that's in the packet with the R4E district, so staff did find that the beneficial effects couldn't have been achieved under another zoning classification. Number three staff does not find that the proposed use negatively impacts public utilities or surrounding properties For consistency with the comprehensive plan staff finds that the proposed use residential is consistent with the comprehensive plan 2050 There's a little bit more about that in the staff report, but this is a designated transition future land use category so a four-story residential building fits within that and Number five is about underlining zoning designation density and the requirement for affordable. So this will be 100% affordable, so it will meet any of those requirements. The supplemental regulations number six provide sufficient justification and performance standards for these purported benefits of sustainability and affordable housing. Number seven, vehicle and pedestrian transportation within and to the district is provided, and it also supports alternative methods of transportation. There are 66 proposed vehicle spaces. Those include barrier-free spaces, and that's one per unit is the ratio. It's reduced from the 70 spaces that were proposed at the pre-PUD petition conference in 2024. Also, bicycle parking and electrical vehicle parking is provided. There are existing sidewalks on both sides of State Street. There are sidewalks throughout the site. And then a new crosswalk with flashing signs is proposed across State Street. The ride has existing routes in the area with stops within a quarter mile of this site. So staff finds that the proposed PD meets the standards for transportation. And then finally, number eight, disturbance to natural features. Staff finds that the disturbances to natural features have been limited to the minimum necessary, and there is required mitigation that is in place. So that is included for the landmark trees that will be removed. This is a vacant site. There are six trees proposed to be removed, but required mitigation will be provided. That is all I have for now, but I'm happy to answer any questions.

Thank you for your staff presentation. I will now open a public hearing on this matter. This is an opportunity for individuals to speak up to three minutes on this item. We'll first hear from those of you who are present with us in chambers. Then we'll turn to remote participants to speak remotely. Press star nine if on phone or use the raise hand feature if on Zoom. For phone access, dial 877-8533. 3-5-2-4-7 and enter meeting ID 977-6634-1226. City staff will identify callers by the last three digits of your phone number or by name if on Zoom. You'll hear an announcement when it's your turn to speak. Please move to a quiet area and mute any background noise. For all participants, whether in chambers or online, please state your name and address at the beginning of your comments. Is there anyone present in chambers who'd like to address us on this item?

Thanks again. My previous comments aside, I very much appreciate that Lockwood is active in Ann Arbor and is building out affordable housing, which we desperately need. So I like these guys. I have a question, though, about financing. On the Klein's lot debate, it came out that the city could not provide city-built affordable housing, even though it actually owned the land, so the land was free, due to a combination of high construction costs, lack of available financing, and some other factors. But Lockwood's able to do 100% affordable housing at 60% AMI on this site. So... Basically, I'm wondering, just for our edification and for future reference, how do they do it? I assume they're getting MSHDA affordable housing credits. Will they be applying for MSHDA Act 381, so-called affordable housing brownfield, TIF financing as well? So this is just an academic question I have. I'm glad they were able to pull it off, at least on paper. And I hope this project actually comes to fruition. You know, one public benefit that Planner Melina Corcoran mentioned is the sustainability part, and the electrification of the building is absolutely a big positive. But there's some confusion around the term net zero, which actually appears in the supplemental regs. The building should be built as a fully electric building with the ability to meet the city's targets of all affordable housing being net zero by 2030. the national green building silver certification mr dronen mentioned does not get the building to net zero and neither does electrification itself you would need rooftop solar probably off-site solar you know a much tighter building envelope etc so are they really going for net zero or is that just rhetorical in the supplemental reg so that's a question i have um And the language in the staff report on the public benefits is also confusing to me. The PUD advances the 820 plan for carbon neutrality by guaranteeing a fully electrified building, strategy two. Strategy 2 assumes net zero energy new construction, not just all electric. So this building, if it's not net zero, will add to emissions. So almost by definition, it doesn't help us meet our 820 goals. It actually sets them back. I'm not saying it's a bad building in terms of sustainability. It's much better than we're getting from others. But I don't think... think it's right to say that it advances our 820 goals. So that's a nitpicking complaint I have. And I'm sure parking will come up. Last time they proposed 70, they're down to 66. I presume that's because Michigan granted the waiver for the one-to-one unit to parking ratio, but wouldn't go any further down, which is unfortunate if that's the case. But I look forward to hearing this aired out, hopefully, during your discussion. Thank you.

Thank you, Mr. Garber. Is there anyone else in chambers who'd like to address us on this item at this time? Manager Kelly, do we have remote participants who would like to address us? We do not have remote participants who would like to address us, so I shall close the public hearing and read the motion. Motion number one, the Ann Arbor City Planning Commission recommends that the Mayor and City Council approve 3695 South State Street Plan Unit Development Zoning District and Supplemental Regulations. Motion 2. The Ann Arbor City Planning Commission recommends approval of SP-250027. 3695 South State Street Plan Unit Development Site Plan Version 4, dated July 31, 2026, and alternative natural features mitigation for 37.25 inches of tree mitigation, subject to execution and compliance with a development agreement. These motions are moved by... All right, we'll go with Commissioner Weatherby and Commissioner Lee. Who would like to kick us off in discussion? It looks like it's going to be Councilmember Dish.

Yeah, I'm going to kick us off in response to Mr. Garber's question because this was something that I wanted to say and I didn't know where I would put it in tonight's meeting. But we often hear that the city should be always, that all of the affordable housing in Ann Arbor should be built by the city. and it should all be in 100% affordable projects. And we're often hearing that private developers have no role in producing affordable housing. And tonight's agenda, which looked like Christmas to me when I opened it, almost 400 units of affordable housing being provided. Thank you very much. is testimony to the fact that in the U.S. private developers are actually the largest source of affordable housing provision and they do it in part through applying for the same kinds of low income housing tax credits as the city does. Now, why the city could not do a 100% affordable project on the Klein lot is that the Klein lot projected 281 units. And this project is 66 units. And so even for this developer, the gap between what the low-income housing tax credits will cover and what needs to be made up is small. I mean, actually, the city could do a 65-unit project, and it will do some 65-unit projects. The Kleinlot project is projected for 281 units. It is larger by comparison to 350 South Fifth. And for the 350 South Fifth project, low income housing tax credits paid 40% of the rent on those units. And so Jennifer Hall had to find $130 million to fill in the gap. And so that project maxed out every possible source of money It relies on a couple of grants that are competitive statewide that will not be granted to Ann Arbor again in 10 years. It relies on bonding through the affordable housing millage, which is something that we can do, but we can't do it all the time for... for X million dollars. And one of the things that enabled or that helped fill that gap was that the 350 South Fifth project is using housing vouchers, which actually raises the value of the rents in the building, which means that you can bond for hire, because you can say you're getting more in rent, even though you're getting vouchers. I know that sounds weird, but we don't have any of those left. So basically, she turned the couch over and shook it until all of the quarters fell out. And you needed a lot of quarters to find $130 million. And we cannot do a project of that size again maybe for a decade. I don't know. Depends. Like, federal government might change. But a project of this size, yes. We could do. Lockwood's doing it the same way Ann Arbor could do it, and Ann Arbor will do. It's the giant project that we can't do. And so this question can be more aptly asked of the next project coming up, because it's much bigger. And it would be interesting to know where they're finding their gap financing. But I think that we're in a discursive environment right now where when people talk about housing, they come to it sort of charged up with their preconceptions. And their preconceptions is that affordable housing is and ought to be publicly financed. And that is a preconception that's never been true in the US and doesn't work in the US. And these projects are testimony to us of how wonderful it is that we get so much from private developers doing affordable projects in the city because what they're doing is usually much larger than what the city can do. So I'm really glad you asked that question because I wanted to say that.

thank you council member dish do we have other commissioners commissioner mills

Thanks. I think that this is a good place for housing, and I did to this what I do every time we see a PUD or anything, is to kind of compare what's being shown to what is allowed in the regs. And so I have a number of them, but I actually first want to start with a question that I think will guide a lot of this. The supplemental regs list out a number of stipulations, but some of them are silent. And is it right that if, for example, front setbacks are not addressed in the supplemental regs, that whatever's in R4E carries over? Yes. Okay, great. So I think that I'm going to go through my list, but I think that that then, just for transparency for everyone else, but I think then that covers a lot of it.

Anything that is silent is R4E. Okay.

What happens someday when we have no R4E, which is not a too far off someday?

I'm going to let Manager Kelly answer that question.

I think that's a really good question that is relevant to this petition, but thankfully does not quite have to be answered tonight because I don't have the answer for you. So I can take that back and bring it to the Commission at a later date. Okay. Or if you need this in order to vote tonight, I could try to get an answer while you were continuing your discussion.

Well, I would just flag the things that I'm going to raise because I did the comparison first and then actually read the full thing where I went back and read the sentence preceding all the regs. It was like, oh, wait, if it's an R4E, then you don't have to worry about it. But these are all of the things that give me pause that there is nothing in the supplemental regs. And so... In case it gives anybody else pause, if R4E changes and so we don't, now it's referencing a district where there's no regs, I'm just gonna give you my list, if that's okay.

If I could just share, there are some examples of where we have site plans with things that were approved at the time that no longer exist. For example, deferred parking comes up. We just had somebody wanted to build their deferred parking. the other day and so we do have to navigate this in a lot of different ways it pops up because we have complicated code and there are a lot of things we're trying to regulate and i would say we also have puds that have no supplemental regulations and then you know a lot of them i think for a couple of decades maybe, just didn't have supplemental regulations. And then when they want to modify their PUD, we have to encounter that and craft it. And then we usually suggest that if they're going to modify their site, that they create some new ones. So it isn't, I guess, so alarming to me because we do deal with it.

Okay, super. And I think, honestly, that many of them are covered. I just want to... Put it out there. Maximum front setback is not anywhere in there. There's also no minimum front setback, but that's in the R4E. So the reason that this came to my mind was in the petitioner presentation, they noted that most of the parking is behind. And I was like, there's nothing in here that... forces the building to be on the road. Again, the reference to R4E does give a maximum front setback of 40 feet. So I think that that may be covered, but that's in there. There's no parking maximum in the supplemental regs. And from my perspective, maybe this is covered by the open space maximum, which is like, and I just want to confirm with staff that parking and vehicular use area does not count as open space. It does not.

Can I chime in again? Yes, please. Okay. So they have to build what's in their approved site plan. So if they move their building and they rearrange parking, they have to come back for a new site plan.

They would have to come back for a new site plan, but aren't we approving the supplemental regs that effectively shape they could...

Yeah, that is true. That is true.

That's why I give it the kind of comparison, because the zoning, the supplemental regs would run with the property, not necessarily. They don't have to build the site plan that they're showing us. Is that right?

There could be a new property that comes in and builds something according to the supplemental regs as approved for the PUD. If they're unable to pencil out their site, that's true.

OK. Great. It's not like the PUD then goes away if they don't build this site plan.

Commissioner Mills, I'm sorry. Commissioner Lee is raising his hand. Oh, sorry, and I'm looking one way. Yeah, are you open to hearing what he has to say? Absolutely, please. Commissioner Lee.

Per the supplemental regs, they're required to provide a minimum of 66 affordable residential units. So I'm thinking from a dimensional standard, it would be very difficult. I think one of the challenges with the site was that it was challenging, and that's why they're going for a PUD regarding setbacks, et cetera. I feel a little bit better by the fact that the PUD supplemental regs require literally 66 units of affordable. So I'm thinking about like, okay, what kind of iterations would actually allow you to push the building back, have the kind of, I'm looking at the waste, the solid waste tracks of like how the truck has to pull in, et cetera. I'm thinking to myself, it would just be, A LOT TO TRY TO REDESIGN THE SITE, ESPECIALLY UNDER THOSE AUSPICES. I HEAR YOU THAT IT IS SILENT ON FRONT SETBACKS. HOWEVER, IT IS THAT REQUIRED AFFORDABLE HOUSING THAT THEY CAN ONLY REALLY BUILD 66 MINIMUM. RIGHT. I guess I'm trying to think, would it dimensionally fit? So I guess I'm not quite as concerned. That was all I wanted to say, that that requirement will prohibit other kinds of maybe a single story asset that's set back.

Yeah. And I think, again, the idea that there's open space maximum is helpful. What really caught my eye is that there was no active open space requirement. But that, again, is covered in R4E. But if there's some concern about R4E and what that looks like longevity-wise, at least caring that for it makes sense to me. The only thing that there's no height limit. But again, that would be covered by R4E. And I know that some people don't care about height limit. But I just want to say how that might look. I want to be transparent in doing the comparison. The only thing that I see that is where they're showing us something that is better than maybe what could be built here in particular is that the supplemental regulations only require half the amount of bike parking. than what they're showing. It requires 16 Class A spots, and they're showing 33. So I just want to be transparent about that, that the supplemental regulations could allow something to be built here with less parking than what's shown.

I just want to clarify. It's a minimum of Class A spaces that there's specific language, but that are not space-saving. So they do have to provide the other bicycle parking. That's an R4E. Yes. But they can use space-saving racks for the other required spaces that are not the 16. So the 16 requirement is for the inverted U, where you can do it on the ground.

And because of the silence on the number, it reverts to R4E. Got it. That's both concise and also, not going to lie, a little bit of like tracing lots of things and all of like flip backs, like tons of flip backs. Okay. So I think that that's... I'm glad that that's there. I'm glad that I did my comparison to let you all know what I saw. The other thing, I appreciated that it talked about electrification in the supplemental regs. So if this is rezoned to a PUD, again, even if this building that we're seeing in the site plan is built, Anything else that would be built would require to be all electric. That's because it's in the supplemental regs. I also had the question, though, just because it's all electric does not make it net zero. And so that is some language that I might check on. I don't want to lose the idea that it is all electric. But I think for all electric to be net zero, you need to be thinking about Procuring power from renewables or doing that on-site or carbon offsets and so Yeah So and from my perspective it's more it doesn't change the What is required here it is just I'm not sure I'm curious how OSI feels about that I

This was discussed with OSI. There is a specific goal in 820, I believe it's goal three, that calls out partnership to transition affordable housing with the core partner, the Ann Arbor Housing Commission, to become net zero by 2030. I think that goal two is the one that staff primarily looked at in the supplemental regulation. I'm sorry, in the PUD criterion that it substantially met. So we can make sure that the correct A20 goal that is being aligned is referenced. But OSI did look at this. They look at all of our PUDs. There are a few petitions where we have identified a greater level of involvement. And so Ms. Malene Corcoran could speak to what they said through those conversations. But we'll make sure that the correct goal is referenced.

OK. That sounds great. And again, I think the intent is right. It's just more like, I don't know about that. in part because I know that we've talked before at this table about checking renewable energy credits and that kind of thing, which is what would be required to demonstrate ongoing net zero if you're not providing it on site.

And I did just want to offer that for clarity and posterity, we could repeat the R4E primary district requirements in the documentation. We can look into that if it gives you more comfort of consistency for the future application. I was really concerned about it before I read the full thing.

But even when I read the full thing, then I was thinking, how is this going to work? So it's in there. Presumably somebody someday, when there's no R4E anymore, will have to go back in the Wayback Machine and figure out how that works.

And I'll say it's also hard to go the other way, looking at PUD supplemental regulations from the early 2000s. And there's a million different things to look at, and every single regulation isn't. So we're aiming to find a happy medium between putting everything in the zoning code and nothing in the supplemental regulation. So I'll just say that.

Yeah. I totally get why you did it. And I don't know what.

i don't know what is right so i would just name it i thought it was holes but it's not holes it's just a kind of reference to the other one um no that's it that's my list so just to recap what we've heard from you the concern that you've articulated is you want to make sure that the supplemental regs continue on with the site regardless of whether this particular developer is able to achieve it And you want to make sure that if the zoning that we are working with today sets any kind of limitations on it, that that is explained somehow to the next developer.

Is that? Yes, that sounds right to me. Okay, great.

I have Hammerschmidt and then Bassuni and then Weitsch.

Thank you. I'm going to stay on the sustainability thing, I think. But also, thank you for bringing this project, 66 units of affordable housing. This is a great location for it, too. It's walkable, bikeable to a lot of community services. I WAS ALSO A LITTLE BIT THROWN BY THE NET ZERO LANGUAGE, SO THANK YOU IN ADVANCE FOR LOOKING INTO IT. BECAUSE, I MEAN, 2030 IS IN FOUR YEARS, SO THIS BUILDING IS NOT GOING TO MEET THAT GOAL IF IT'S NOT PROPOSING NOW TO BE NET ZERO. BUT WOULD THIS BE ELIGIBLE FOR THE SEU? DID OSI HAVE ANY SORT OF, LIKE, IF THEY BUILT IT AND IT WASN'T NET ZERO, IS THERE A POTENTIAL FOR

I don't believe the SCU was brought up in any conversations that I was in with the petitioner and OSI. They might have had separate, but I don't believe that was brought up.

OK. So that supplemental regs, you guys are working on that. That's great. Project overall, the site is vacant. It looks like it's never been developed. So a gas line does not currently exist. So I don't love the backup gas generator bringing in an entirely new gas line to do that. You can, obviously. We can't say you can't. But if there are any alternatives you could look into for emergency generation, like battery storage, that would be a lot more aligned with the goals of Ann Arbor. That's it. Thanks.

Thank you, Commissioner Hammerschmidt. I have Bassiouni, Norton, then Weitsch.

So yes, thank you to the petitioner. Thank you to staff. I am also excited by the prospect of more housing and more affordable housing. And my comment is related to page six on the staff report number seven. So the vehicle and pedestrian transportation. Because... Since it's mentioned, a new crosswalk with flashing signs is proposed across State Street. And as someone who is mainly a pedestrian and transit user, so I use the ride fairly frequently, I've actually walked part of that corridor northbound. It's not fun. And I wanted to flag, if possible, if there's a way to not just have a flashing crosswalk for pedestrians. I understand that might be outside the petitioner's purview. But for staff in particular, whether that's an elevated crosswalk, a way to generally reduce speed in that section of the corridor. Because I was just looking at the ride's current routes. And I believe the 6 is the main one. I believe, based on what their routes are currently posted, whether north or southbound, you have to cross the street. So you have to be on the west side of State Street. And so that is a very fast area. And even when I'm crossing places that have flashing crosswalks, even within a 25 or 30 mile an hour section at different parts of the city, it takes a minute for people to stop. And it can be very, as we've witnessed in recent weeks, it can be really tragic if someone gets hit. And so I'm a little worried that even if there's a flashing crosswalk, if there aren't additional physical reminders to change behavior around speed, that there might be some issues there. So I just wanted to flag that. Not to be a Debbie Downer, but I am very excited about this project generally. So thank you.

We like Debbie's. We can be a Donna L. Downer. All right, let's go to Commissioner Norton.

I did actually have a question on the crosswalk. I think for staff, is the project proponent proposing to put in that crosswalk, or is the city doing that? Or who's actually responsible for that?

It's part of the project. It is part of the, yeah.

I think we're kind of stuck. I mean, I share...

Commissioner Busuni's concerns about that traffic corridor, it's kind of scary, but I don't know any other way around it. And at least having a dedicated crosswalk will be a step in the right direction. I thought I would make that observation. I want to say something, speaking back to Commissioner Mills' questions. And I want to start off by saying I'm not the city's attorney, I'm not the city's council, but I would point out that, and we're going to be running into this, when we make rezonings, that could likely lead a lot of projects to be non-conforming uses that will continue to exist as long as they exist because of the way the Michigan Zoning Enabling Act allows for non-conforming uses. So if you have supplemental regulations that clearly point out the base zoning applies, the base zoning applies, and they will continue to apply until they're changed. And if they change, you might end up with a non-conforming use status. And then that happens any time you do a rezoning. So there's nothing particularly unique about a project like this where the rezoning could, in the potential, any zoning district in the city could change if the city council decided we're going to rezone property. So that issue will come up, so I don't I Don't I'm trying to say this in a very generic way. I don't see problems where there's a project that Could end up with a different zoning classification at some point in the future because that could happen anytime There's nothing unique about the way a project like this would play out that would be different than that So I'm not sure so all of which is to say I'm not particularly concerned about that this property, that the R4E zoning district could go away, that's gonna be a problem all across the city. That's not gonna be unique to this. That's gonna be an issue that pops up wherever that happens. Is this making sense? Am I making sense?

You are. I think that I understood the nonconformities, but unless this PUD is also rezoned, now we have a PUD supplemental regulation that references a dead district that has no standards anymore in the zoning. That's what I thought was odd. But I understand how they would do it.

So this would be where we want to talk to the city's attorney. If you will, yeah. And not get too far in. The crosstalk is hard for everyone. Yes, I'm sorry. So that'll be a question especially to confer with the city's attorney. But I think it's a class of issues where the rezonings are going to happen, and we just have to sort that out.

So with the permission of the table, Commissioner Mills, would you like Manager Kelly to take this concern further than our discussion to the city attorney to consider this? It doesn't have to be urgent. It's just whether or not you feel you want to carry it forward.

It feels like there's lots of this situation. So I brought it up, but it sounds like there's a plan. So that's not super important to me.

Okay. All right. Sorry. Go ahead. Yeah.

I'll just say that the city attorney has reviewed the draft supplemental regulation. So they have looked at it. We're happy to follow up with some of the language, but the city attorney has looked at it. And then I'll also say that our transportation division is very concerned with these corridors. I don't know that, you know, their exact plans and where... But these are questions that come up all the time in their work. They're the main department who reviews these kinds of safety things. And they did review and sign off on this proposal.

All right. Thank you. I now have Lee, then Weitsch.

Thank you. Looking at the standards for the PUD district review, I think that this project meets essentially what is being proposed. So I did double check the Ann Arbor comprehensive land use plan. This area is shown as a transition zone. I understand there are concerns as it relates to what that will look like eventually. That being said, I think the standards by which under Section 5.29.11 is in front of us right now, I think this is a good project that meets those criteria for prosperity sake, the this to confirm with actually staff, this will have site plan approval here subject to a development agreement, which is that city council and the pod rezoning also goes to city council. Is that correct? Yes. Gotcha. Zooming out a little bit, from my standpoint, it meets the standards of the PUD rezoning as requested. So I'm inclined to support this project. Thanks.

Thank you, Commissioner Lee. Before I make my comments, Commissioner Weatherby. Commissioner Adams? Okay, so I do have a couple questions. One for the petitioner, so you can come on up. Let's talk about parking because you are, what, 64 to 66 units?

66 and 66. Oh, it's one-to-one. So was that a requirement from MSHDA? It was not. So MSHDA's standard is two-to-one, two parking spaces per unit, but they've since revised that since the time we've been here.

They have, and they have said that you can defer to the local municipality, which has no, yes, Mr. Garber, which has no minimum parking standard. So then why did you go to one-to-one?

So this was more of a market decision at that point as far as what our market analyst and then the I can't remember the acronym of which department with admission, but they have a market analysis division that reviews and comments on all the rents and things like that. So the one-to-one was probably the minimum that we felt in a semi-suburban setting was appropriate in this case.

But it's not depending on your financing. So sometimes we hear developers say, we can't actually get this development to Pencil because our underwriters won't fund it because we don't have enough parking. So none of that is in place. So this sounds like it was just your decision based on your market research to do a one-to-one development.

Yes. So both of those are true at the same time. So we felt based on our analysis that the one-to-one was the minimum ratio that we felt that we could successfully lease these up. So that's how we presented it to potential investors. So those investors could have come back and said more, less, et cetera, et cetera. And then we would have had that negotiating back and forth process with them. But everybody involved in the investment side felt that the one-to-one met the market study and was appropriate for this location.

So you have data on your actual properties inside Ann Arbor, correct? Of what the parking looks like.

I would say we, I mean, we observe it. I don't know that I necessarily have specific surveys on our properties in Ann Arbor specifically. So for instance, we have a senior property that we mentioned earlier, totally different product type. So I could survey those. I could probably get some data from that, but I

Well, I mean, we're here now and you've put 66 in unless you're going to reduce it by time it comes with a site plan. I mean, I would love to see a little bit more information on what the parking need would be because it's right on a bus line. It is kind of a car-centric area. It's not a pedestrian-friendly area. I have biked it because I bike to Costco because, as some of you know, I like to bike around the city. And so it's a very treacherous place to bike. There's not a continuation of a sidewalk. I actually got sideswiped by someone coming off of 94. They wanted to be in the lane that I was in, and physics said that I had to move. So they totaled my car so that they could get into my lane. So that was really great. So as we're looking at all of this, I just really would love if you get your rezoning and you're back with an actual site plan based on that rezoning that you could at least apprise us whether or not you've looked at the need in order to have that much parking. Because it is taking up a lot of space on the property. The other thing I wanted to ask you about, and this is just... ongoing conversation that we've been having at the table. You've said something tonight, and I just want to make sure I heard it correctly. Both the positioning of the building, the site, the layout, and the parking have been necessitated by both fire and solid waste. Did I understand that correctly?

I think that's safe to say that that drove something. So as a specific example, the drive lanes need to be 26 feet wide from where cars would back up. So previously, we had them a little bit narrower, which allowed some more green space. But based on the feedback that we got from various city departments, we did have to widen those drive lanes a little bit, which I would love to have more green space, but at the same time, we're always going to defer to a life safety situation when the fire department is telling us to leave. Sure.

No, and I'm not trying to pitch you against the fire department. Please don't feel like you have to say anything along those lines. I think what I am trying to understand is we have heard from multiple developers that some of the requirements for fire life and safety, as well as waste management, impact significantly the developments that they can do, especially when they're in tight sites. And yours is a small site. You're sitting between the U-Haul and you're sitting next to the hotel, so you don't actually have more land that you can acquire to accommodate it. And that is impacting your ability to provide the development that you want. But I'm not hearing you say that it would have restricted the number of units or the number of housing configurations. Is that correct? I think that's safe to say.

I think if we had a little bit more flexibility on some of those issues, it would have just resulted in more open space. But not more units. I don't think so. I would have loved to have fit more units on the site, to be perfectly honest. We went through a million different iterations, and this is really the max that we felt that we could fit on the site.

Okay. Mr. Garver asked a question about your financing. I wanted to give you an opportunity to answer that. If you remember his question, if not, I can ask him to come back up and restate it.

Yes, so the financing is mainly made up of the low-income housing tax credits through the state.

I'm sorry to interrupt you again. Is it the 3% or the 9%?

It's the 4%.

It's the 4%. Can you explain the difference of the 4% just for those of us who are here? If you understand it yourself. If you don't, you can just pass. I'm still trying to understand. Okay, great. Thank you.

The amount of the credits is based on the total construction cost of the building. And there are certain items that are eligible and not eligible. But a simple way to think about it is the total cost of the building. There are two different programs that you can compete under for funding. There's a 4% and a 9%. That number corresponds to the amount. So let's just make the math simple. Let's say it was a $10 million project. you can take credits at 9% of that 10 million or 4% of that 10 million. So they're different programs and different ones have different point scoring metrics, different levels of competition. There's different income levels associated with each one. So with each project, you really try to pair it up with what is the best fit. And in this case, the 4% was the only real viable fit for this one.

And then how are you closing the gap? Because that 4% doesn't cover everything. So are you using, what's the rest of your capital stack, if you're willing to share that with us as we try to understand how you are building this development?

Yes, so the tax credits usually make up about 40% of the stack, so I think one of the commissioners mentioned that tonight, and that is an accurate figure. The rest of it is made up of a first mortgage, so it's based on the potential revenue that it can generate, and then there's a debt service coverage ratio that you apply to that, so that gets you to your first mortgage. Then the remaining gap piece is made up with the Ann Arbor Housing Commission has contributed funds as well, so I think they put $1.5 million into the project. So those are the three primary sources. There's debt, there's the equity from the tax credits, and then there's the participation by the housing commission.

But no limited partners are riding along in your capital stack here?

There will be an equity investor who buys the tax credits. So they are the limited partner in the transaction. They get the credits. We then use that as the equity to build the development.

Okay. And then are you aware of the Southside Business Improvement Zone and have you talked to that group about this development and how you can improve pedestrian, you know, interactions with state? Not specifically. Okay. There's an MLive article dated March or May 6th. I'll send it to staff or I'll send it to a planner, Malene Cochran, since she's the planner on your project and then she can forward it to you and it has all the details because they're trying to redo state to make it a little bit better for everyone.

I think we'd be fully supportive of that.

Great. Well, with that, I will turn again to my colleagues to see if anyone had any final comments. Are we ready to vote? Oh, no. We do have a final. And I didn't mean that, oh, no. I just saw it, and that was the utterance. Oh, yes. We have another comment by Councilmember Dish.

I just wanted to ask if the crosswalk with flashing signs is the same as a rectangular rapid flashing beacon.

Rapid rectangular flashing beacon. RRFB.

I got all those letters right.

It is indeed the same.

Thank you. Maybe we should put that in just so that no one thinks that IT ISN'T ACTUALLY THAT. BECAUSE THAT'S A PRETTY HEAVY DUTY THING FOR A CROSSWALK. I MEAN, IT'S THE BEST THING.

PUT IT IN WHERE?

INSTEAD OF THE WORDS A CROSSWALK WITH FLASHING SIGNS.

IN WHERE? IN WHAT DOCUMENT?

IT'S SOMEWHERE IN THE STAFF REPORT, I'M PRETTY SURE.

I THINK THAT WE WOULD SPECIFY THE EXACT DEVICE IN THE DEVELOPMENT AGREEMENT, WHICH IS STILL UNDER REVIEW WITH THE PETITIONER AND CITY ATTORNEY UNTIL IT GETS TO CITY COUNCIL. BUT WE'LL MAKE A NOTE THAT RRFB

just to make sure that everybody knows that it's not something less.

Yeah, we can pull the exact Michigan Manual on Uniform Traffic Control Device call number for it, if you'd like.

No, no, I really don't think we need to go that far.

I know it gets scary once you start to...

get into that.

I just wanted to make sure that that's where you were.

And who says planning meetings are boring?

No, they're not at all. And I did want to just say that I was actually the client slot is going to be 500 units. Phase 1 is 281. So the gap on that you'd need an elephant to close it.

Great.

Are we ready to vote? Manager Kelly, would you please call the roll?

On the two motions as presented... Weish.

Yes.

Hammerschmidt. Yes. Adams. Yes. Dish. Yes. Mills. Yes. Weatherby. Yes. Lee. Yes. Norton. Yes. Bess Uni.

Yes.

That carries.

Thank you for the project and good luck. That takes us, are we good? We don't need a break? All right, great. That takes us to 10B, 2285 West Liberty Street site plan for planning commission approval. So this one stays here and our decision is final. SP26-0001. The site plan proposes a 343-unit residential development in the TC1 district. The project would be 100% affordable for an average income of 60% AMI. The building proposes to be 12 stories tall. The first three levels are dedicated to a parking structure with nine stories of residential above. The height of the building tapers down as it approaches an R-zoned parcel to the south. The ground level would offer co-working and office space along West Liberty. Class A bicycle parking is provided on the first and second levels. It is located in Ward 5 and staff recommends approval. We'll start with a petitioner presentation, 10 minutes. Green, you're good to go. Yellow, start to wrap it up. Red, let me know if you really need more time. Then that will be followed by a staff presentation by Planner Michelle Bennett. We will then have a dedicated public comment, not a public hearing, but we will still have a dedicated public comment. I will read the motion. We will move and second it, and then we will start our discussion, which will then be followed by a vote of approval or denial. With all of that, good evening and welcome.

Good evening, commissioners. My name is Cody Dietrich with Tree and Development Partners. We're out of Roseville, Minnesota. Thank you for having us tonight and hearing about our project at 2285 Liberty. Part of what we are trying to do is really focus on building more urban TOD affordable housing sites, and that's where we got lined up with this project. So I won't delay it too long. I'll just hop through and go through the project pretty quickly, and then I'm happy to answer some of the questions. I'm sure we'll get some of the same ones from the last developer as well. So to start off with, this is the whole area over on Stadium that is the TC1 zoning. Our site is the Red Star. I know most of this, if not all of it, was rezoned over the last couple of years, progressing for further density and less parking and furthering TOD in general. So our site, with that, the TDC-1 residential zoning has a setback of 300 feet. So we, just to show that on the screen, we're 300 feet from the center line of Maple, and then that curves around because part of the parcel below us to the southwest is residential and parts parking. And so we use that to then set our setbacks of the building. So part of our building steps down to nine stories on the backside just because we're using a 30% boost on the height of 75 feet and that gets us about 97. And then the additional part, we're up to 12 stories, which is about 125 feet, 30 feet lower than the max allowed on that area. The site plan overall, so along Liberty, we are focusing all of our amenities, our office, our co-working, and then with just a side access into the rest of the site. We worked extensively with fire engineering. We had to change a few things to make sure we had our water loops in there for fire hydrants and things like that. But eventually got that through with the rest of city staff. So we have our side drive that comes down the east side of the property that then enters the three-story parking garage. And then on the back, we have turnaround areas for the trash. as well as we have a playground in the back and then a dog park back there as well so our our plan is to serve more families actually we have 157 units that are two to four bedrooms versus uh primarily focusing on one bedroom so almost 50 of our project is two to four bedrooms for serving those families Here's a view from the east elevation. You can see the lower levels parkings, and then we get up to the P-shaped, we'll call it, building. We did a couple different setbacks on the front side as well just to add some articulation to the front of the building. We also incorporated an underpass below the building. We originally had that over the drive aisle, but working with engineering, we had to pull that back in. But that allows for a drop-off area as well as just additional way to pull the building out and get more units on site so we're looking to maximize as much as possible going back to the site plan real quick you can see the trees and the slope on the southwest portion of the site that is all steep slope that just drops off so we are very cognizant not to affect that we're moving a few trees in the playground area but primarily preserving all the natural features on site here's a list a look of the building looking down Liberty towards the west towards downtown Here's the elevation from across the street. Again, we tried to keep the angle of the street to keep the lower levels parallel with that and then stepping it back to add some articulation and interest to the building from there. Here's a slightly different view at night lit up. So for our sustainability, one thing that we've really tried to do here is really push the renewable energy. So we're actually going to be doing geothermal on this site. Underneath the building, we'll have 60 to 70 wells for serving the building. We are an all-electric building. We will have some different things that are gas. We'll have some gas grills and fire pits along with the backup generators that are planned currently. Right now, there's no stormwater for the site. We'll be implementing a full stormwater management system that will then be piped down to the full drain on the south side of the site, preserving the natural features. As part of our MSHDA funding, we'll be doing enterprise green communities, which is similar to the NGBS that Lockwood is doing on their project, just a different program. And we're using responsibly sourced materials, as many as through Michigan as possible per MSHDA's guidelines, so... And then just to give a little context of why we chose the location of the site as well, too. So I don't know if you guys have heard about qualified census tracts are difficult to develop areas. There are certain areas designated by HUD, QCTs as the qualified census tracts are more lower income, higher poverty rates, and difficult to develop areas are more affluent and have higher cost to build in. So those really dictate where you go on the 4% affordable housing deals because they give you a 30% boost on your eligible tax credit basis. So if you have $10 million in eligible tax credit basis, that goes to $13 million. And if you sell those tax credits at $0.80, you just generated an extra $2.4 million in the project with Without that, projects just don't work in a day's world. So we actually were in a QCT in 25. We submitted our application to MSHDA in December of 25 to preserve it. It preserves it through December of 2027. We have to close on the project by that point to maintain that QCT boost. Otherwise it goes away and the project becomes unfeasible. But this is just a map to show you kind of where those are. It's the 2025 map. Primarily it's downtown, North Campus, and then the research park where the Lockwood development is, and then this spot. Going forward in 26, this is what it is now. Again, really just the research park or the high cost of land in downtown. So very limited areas do 4% deals. The new maps are going to be released sometime here in the next two weeks before the end of September, but that's what drives a lot of decisions around affordable housing in not only Ann Arbor, but across the country and making the deals work. So when we get into it, happy to answer questions on financing, stuff like that too. I'll let that organically come up and can go back and forth on that piece, but otherwise I'll open up for questions for everybody else.

Great. Thank you so much. Planner Bennett, do you have a staff presentation for us?

I do. I'll just start with a few background points here. So this site is on West Liberty between Stadium and Maple. It's about three acres. There is a building on site that they are proposing to demolish. The A1 rental is currently there. For 343, 100%. affordable units back in July their pilot which is a payment in lieu of taxes was approved by City Council which is one step or one document that developers need in order to help with their financing They had mentioned that due to its adjacency to an R4B parcel, which is vacant but is zoned residential, the height has to taper down as it nears the residentially zoned parcel. They did request, or they are eligible for a height bonus, which they are using. But as mentioned, they left a little bit of height there on the table in the front. They could go up to 156 feet, I believe, went up to 120. They went over their sustainability features. In terms of natural features, there's no floodplain on site. There is the steep slopes and the wooded area, which are heavily preserved. There are a couple conditions here that I would like to note. So staff is recommending a conditional approval. on page one. You can see in my staff report, those are two conditions laid out by our urban forester and our land development coordinator regarding stormwater. The applicant is aware of these and already working on them. So an approval tonight, if there's an approval tonight, would just mean that they need to submit these to us within six months before they can move on to the next phase.

thank you i will now open a public comment so this is an opportunity for individuals to speak up to three minutes on this one item we will first hear from those of you who are present with us in chambers then we will turn to our remote participants to speak remotely press star 9 if on phone or use the raise hand feature if on Zoom. For phone access, dial 877-853-5247 and enter meeting ID 977-6634-1226. City staff will identify callers by the last few digits of their... phone number or by name if on Zoom. You'll hear an announcement when it's your turn to speak. Please move to a quiet area and mute any background noise. For all participants, whether in chambers or online, please state your name and address at the beginning of your comments. Is there anyone present in chambers who'd like to address us on this item?

Thank you, Chair Walsh. Ken Garber again. Honestly, I don't enjoy being the only person to comment on these projects, but here I am. Impressive amount of affordable housing here. I'd like to hear more about the financing than we just heard. Planner Bennett mentioned the payment in lieu of taxes. It looks like It's a city tax exemption, and the pilot service fee is $1 per unit per year. So basically, it looks to me like city taxes are being forgiven here. How much does that contribute to the viability of the project, if I'm right? So that's a question. So the development agreement conditions don't include the sustainability elements. I noticed on the first page of the site plan, there's a sustainability checklist that includes the geothermal and the green community certification. My question is, is that binding? Can we count on that to... that checklist to be enforced on the developer? Does that have teeth? The geothermal is great to hear. I have several questions about that. How far along are they in the heating and cooling energy modeling that you'd have to do to determine the feasibility and the size of the system? Where will the boreholes, the 60 to 70 wells, be physically and geographically on the site? The bore field. Have you done test bores? And FTC, that's formation thermal conductivity testing. Are you going to be including ERV, energy recovery ventilation, in the building? Which I've heard from geodevelopers is pretty much mandatory when you're doing geothermal. Is the geothermal going to be supplying all the heating and cooling for the building, or is it just supplementing VTACs or some other electric system? As you can see, I'm really curious about the geothermal elements, because this could set a good precedent for future buildings. I'd love to see this happen. I don't know if they're in the Gelman 1.14 dioxane contamination zone, which shut down the Slosson Geoproject. I think they're south of that, but I'm wondering if they've looked at that. Finally, this is another not quite all-electric building. We use gas for emergency generator, outdoor grills, and fire pits. As Commissioner Hammersmith mentioned for the previous development, it really doesn't make sense to extend a gas line for this kind of stuff. We've talked in the past that if you're going to do a backup fossil fuel generator, it should be diesel with on-site storage. Thank you.

Thank you, Mr. Barber. Manager Kelly, do we have any remote participants who'd like to address us? We do not, so I shall close the public comment and read the motion. The Ann Arbor City Planning Commission approves SP26-0001, 2285 West Liberty Street, Site Plan Version 5, dated July 31, 2026, subject to... Execution and compliance with the development agreement and the following conditions, which must be satisfied through the submission of revised plans within six months of approval by the City Planning Commission. For stormwater, there are two conditions. It's sheet C as in Charlie 510 and sheet L as in Larry 101. All conditions must be fully satisfied through the submission of compliant plans prior to the city's acceptance and or review of city engineering plans and prior to the issuance of any associated permits for the development. This motion is moved by Councilmember Dish. and Commissioner Weatherby. You all, I'm pausing so they can write down, because you're like, why are you slowly trying to figure out what her name is? Okay, so with that, we are in discussion. Who'd like to kick us off? All right, let's start with Commissioner Mills.

I do not have the same litany of things to start out with in this one because this is using the TC1 zone. And so thank you for the staff report laying out kind of each of the relevant provisions and that this complies with it. The question that I have, though, is specifically around the sustainability provisions, too, and whether there's teeth in that, because it would be amazing, although I agree in terms of the backup, but that is not part of the TC1 district, correct?

No. And I guess specifically... Are you talking about the checklist that was brought up?

The geothermal and mostly all electric except for those couple of outdoor things.

So in general, those are never... This is my understanding. Please correct me if I'm wrong. But those are never required. Right? Those are some of them belong to the building code or energy code of which we are not allowed to deviate from. So I think in some circumstances, maybe in a PUD or maybe where there is some more negotiation, those things can arise. But when we are applying strictly TC1 zoning, those, I would say, do not have teeth.

So even though they're shown on the site plan in that sustainability checklist, it doesn't necessarily mean if they don't put geothermal that they're not in compliance. Is that right? Correct.

OK. Do you agree?

It would depend on how changing the geothermal, the boring locations, and how it fits into the site are in the site plan, which is available on stream. It's also attached to tonight's packet. If you do a search for geothermal, you can find those pretty easily. And the extent to which this would come back for a planning review trigger, if that were not completed, would depend on our development approvals level table in the UDC that tells us what changes made on site require what review and by what body. So if building walls move prior to something being built, if they need to move a wall even less than 10 feet, would require currently, which is a double-edged sword, planning manager approval. But right now, if that were to be approved and an exterior wall changed because they decided to go with a different heating source and they want to rearrange their building, there are a variety of things that could potentially trigger a new review. But if it is not adjusting anything that would substantially alter the The the private side of the site for example something in the right-of-way something that comes up during civil Then I guess it is possible that they could build it without the geothermal and we would ask them for updated sheets for our records Okay, and I mean the same is true for when we see all electric buildings So from my perspective, I'm not counting on it.

But since you said it tonight publicly and it's recorded and we have a long memory of I certainly hope that it comes to me. But I'm curious about some of the details and how much you figured out. So yeah, in particular, questions about the Gelman plume and any other details that you want to add in terms of how far along in the engineering you are on that.

Yeah, so I'd say from what I remember, I don't believe we're in the plume area. We've been working with a couple of local drilling companies who've given us preliminary well locations and loads. We are just starting the energy modeling along with our architectural design right now. So we're in the early stages of that piece. But the one thing about geothermal that kind of ties in the financing side when we start talking about that more is we're able to get the Section 48 investment tax credit. So we actually qualify for additional tax credits that we can sell to those equity investors. And so with low-income housing tax credits and doing affordable, you kind of get a double dip. So you get the low-income housing tax credit off that system, and then you get these investment tax credits off the systems. And then it makes your building more energy efficient, so then you can work through some of your pro forma rent and expenses to help out with that piece. So we're actually slightly coming out ahead based off the numbers we're currently running. So that's helping with making the deal more viable.

Interesting. Okay. Yep. That's good to know. I mean, again, you told us here, it's shown on your site plan. I hope that this happens. And I also know that that is not something that our code ties you to. And so we should just all be clear about that.

yeah we had been talking additionally with the sustainability arm of the city as well missy and shoshana a few different times we actually talked about could we add additional wells to service some of the neighboring buildings it just got to be too complicated with bringing our utilities on site and having the water mains which require additional easement areas so we don't have any really extra room to go back to the site overall we're over just over three acres but by the time we preserve all the natural features we're down to about an acre and a half of buildable land

Okay, great. Thank you. My other questions, but I'm going to punt to somebody else who asked more about the financing. I was surprised to see a parking structure because I've been told that it's very expensive. And the same thing is true with things that are in the high-rise territory, which I was under the impression that over eight stories is high-rise territory. And so that... I'm curious how that works. So you're welcome to start that. The smarter commissioners than I am will ask more about which kind of financing stack and all of that kind of thing.

Could add start in that piece then so parking structures. Yes are inherently costly But the problem you run into a lot of times is especially urban settings. They're very inefficient You're trying to build them on half acre sites where you're not able to extend them out further have double loaded corridors You're building additional walls around the whole thing. Whereas we have open space in the center of that So we're just making it more efficient by having such big plates on that piece. Um And so MSHDA doesn't allow us to charge for parking as part of their guidelines and policies. So we actually get tax credits off of the parking to help pay for part of that. So when the gentleman from Lockwood was talking about it, so if you get 4% tax credits, and let's say the parking garage costs $10 million, and you get 4%, so it's 10 million times 4% plus QCT boost, so 13 million times 4, but I'm just going to do 10 times 4. So that's... 400,000 then you take that times tank is over ten year period so we get four million dollars back to help pay for that and then what part of we get benefit here is we have the economies of scale by doing 300 plus units to help offset some of that so we don't have the land area to actually surface park part of it so we had to do it this way and so the other benefit we have here is we're not downtown land which is much more expensive I had previously used to do only student housing and was looking at a site here and I was paying $30 million an acre for a potential site we were looking at in the downtown area. So we're not paying anywhere close to that out here outside of downtown. So a lot of those factors just push and pull on it. And it's not right for everything. If you have a 100 stall garage and 100 unit building or a 66 stall and a 66 unit building, that's gonna be much more costly than a 300 stall on a 343 unit building just because we have more efficiencies in the plate.

Thank you, Commissioner Mills. Commissioner Dish?

I just want to echo something that we just heard, which was that upzoning along transit corridors that are outside the downtown core makes it possible to build housing cheaper and even build affordable housing. I'm sorry. It's hard to believe all that our theories are coming true.

It's not easy, I'll say that. No, I'm not suggesting that it's easy.

No, it's kind of amazing. So because you speak quickly, and it's not even the end of a longish day, I just want to make sure that I understand that the tax credits that you're getting to get the 30% boost are the ones for developing in low-income areas. Yeah, so it's the QCT. It is the QCT. It's not difficult to develop because the costs are high, which makes sense because of what you just said, which is that this is actually not a high-cost place to build in Ann Arbor itself.

And to add to that, too, typically around universities you see it be QCTs because students technically on paper don't make any money. So that's what drives up around University of Minnesota where we're out of Minneapolis, Michigan, wherever it is. It's typically a QCT all around the universities because on paper, it's typically a poverty area.

Yeah. Yeah. In Minnesota, kind of, actually. But anyway, I used to live there. The area around, you know, Seward and stuff. Although it's gentrified and it's gorgeous. I love that city. Anyway, neither here nor there. Okay. So... Okay. I think, yes, oh, wait. But I just wanted to follow up on the conversation with Commissioner Mills. Even if you had to move a wall because you decided not to do the geothermal anyway and it triggered a new site review, we still wouldn't be able to require geothermal. It would just come back, and it's a pain for everybody. But this is great that you're exploring it, and it was... Again, extremely heartwarming to hear that there are actually credits for doing geothermal. So you really are getting a lot of bangs. You're getting a lot of tax credits. And then geothermal should save you money on heating, which is the entire theory, right? And so this is, in a way, a model project for many of the things that we want to suggest are possible. And I understand they are not easy. But if you get this up out of the ground, it will be possible. And also, the unit mixes that you're providing are really important. And one of the things I understand from Jennifer Hall is that when you are housing families, they do want to be able to park cars, because children need to be driven.

Yeah. I mean, ideally, you know, we're trying to play into the more TOD aspect and, you know, we've, we've seen some different studies that show that Ann Arbor is kind of at that 0.6 to 0.7, even at market rate properties around town, but we wanted to be close to that one-to-one just because we have such a high family piece, but we didn't want to go to 1.2. You know, we were looking at, but we were also looking at the cost back to the cost of parking. That's, this pushing and pulling factor on that piece. And just to add one more thing, another thing to the investment tax credits actually is you get the investment tax credit not only on the geothermal wells and loop system, you also get that on the heat pumps and the mechanical connections throughout the building. So all the things tied into any part of that heat pump system and the geothermal is all investment tax credit eligible.

Other commissioners? Let's go, oh, we have the manager. All right, so we'll start with Manager Kelly, then we'll go Norton, then Bass Uni, then Weitsch.

I just wanted to provide some context around the development agreement. This is a TC1 zone. It is a project that stops at the Planning Commission, as was mentioned. The only reason, and we do try to avoid development agreements when they're unnecessary because they can add complications in the final approvals. We often cannot issue permits until the development agreement is passed by council, signed, recorded by Washtenaw County, you know, checks sent to us, etc. It can be, there's a little bit of administrivia, and if we don't have to do it, we try not to, especially for this type of project. The reason why it has one at all is because they're committing to make some improvements to lighting in the right of way. And so the flexibility of projects to pencil out, even if it didn't have the geothermal from the staff perspective, we want to make sure that we still get the affordable. So then locking them in isn't something that we would have tried to do independently. So I just want to mention that.

Thank you, Manager Kelly. We'll hear now from Commissioner Norton, then Bass Uni, then Weitsch. Oh, nope. Then Weatherby. Then Hammersmith. Then Weitsch.

I have just a quick question for you. I think this is a great project. It's affordable housing. I'm very familiar with this area. I think it's a much better use of the land than the A1 rental. Please... What a terrible thing to say, I'm sorry. I'm also quite worried about walkability. And I know, and maybe you've explored this and it's just not possible, but the back end of your property is right adjacent to a pretty sizable shopping area. Are you going to be able to put a path that connects the back of the building so that people don't have to walk all the way around to get to those areas? Because they're probably going to do it anyway if they can figure it out. Is that feasible at all? I know it sounds kind of like a trivial question, but I'm curious.

it gets to be tough i have my my civil engineer in the background over here because then also you trigger ada requirements and then you have to provide a similar accessible path down there and that would cause us basically to rip out the whole woods and zigzag back all the way down the hill to make it work so conceptually love the idea we thought about that piece too but just physically and meeting fair housing it's not not in the best interest But, you know, again, this is a very walkable area. I think the walk score is 86, if I remember right. I think the bike score is in the 80s. As part of our MISTA guidelines, we do all these amenity maps, and we have four grocery stores within a mile, and, you know, just 30 parks within two miles. It's an incredible location to serve families. And back to our market studies as well, we have a 25% rent advantage on our 60% AMI units over what market rents are for market rate apartments in this area.

I recognize the challenges. If in the future there's some way, maybe working with neighbors to create an access point, that might be something to look into. Just because if you walk around, now you're dealing with people pulling into parking lots and such. So it's really nice to be able to walk someplace and not have to be dodging cars at the same time. So I recognize we can't require that through this, but just to encourage you to keep exploring options I think would be great. Thank you.

Thank you, Commissioner Norton. We will now hear from Commissioner Bassuni, followed by Weatherby, followed by Hammersmith, then Weitsch.

Awesome. Yeah, thank you, petitioner. Thank you, staff, once again. I concur with Commissioner Norton about the... I think, Commissioner Mills, you said this at a previous session about a different property, but, like, yeah, if that... If there isn't a path, there will be, in terms of just practicality, given that there are various grocery stores. So yeah, if that's what you consider, great. My question, I think, is for staff again, mainly for my own edification. Because I was looking up A1 Rental in preparation for tonight. And they're an equipment rental company, is my understanding. So it's like medium-sized equipment. It's like Bobcats, loaders. I forgot there's a company called Ditch Witch. They have those if you need it for your needs. But my question then is, is this site considered a brownfield or not in the sense of these devices and tools if something spills or something like that? So I'm just curious if that is considered.

I think the applicant would know better than me. So if you want to take that question.

Yeah, it could be considered a brownfield. We haven't went down that path. We've done our environmental studies. We're actually working on our due care plan and our BEA for Eagle right now just to make sure in case we encounter any contamination during construction that we handle it appropriately. We also did actually look into transformational brownfields just to look into it, but we don't have a big enough mixed-use project to trigger that piece. Our project costs trigger it, but we need a major kind of retail component or an office component or something like that to trigger it.

Gotcha. Thank you.

Yep.

We'll hear now from Commissioner Weatherby, then Hammerschmidt, then Weitsch.

Just a couple things. There was some chatter online about how the city is pushing out A1 rental with a new building. And that's not really how it works. But I just, this is going to be a really, it seems like a really great project. it is going to be dramatic, I think, in that space. The image you showed with lots of green trees and stuff is lovely, but that's...

It's not winter.

Yeah, and it's not, you know, it doesn't... uh the renderings are all very pretty and nice but not necessarily always exactly what it looks like when you're experiencing it so i think people are going to be startled when this gets started building and that there's going to be some you know maybe pushback but we get a lot of things that say people really want affordable housing and the fact that this is going to be a large building that is not luxury housing but is actually affordable housing i think this really could show a lot of really it could show people what could happen but also it could show people what we're gonna need to make large amounts of affordable housing and so I just this isn't related to sort of you or it's just that this is going to be one of those where it is a shame that there is not anybody here participating in this because I think that this is one of those buildings that People are going to be really surprised about when it happens if somebody hasn't kind of tipped them off. But I also think it's really great. And I did want to, so that's just kind of word salad there.

I can add a couple things to those if you want to.

If you will. We'll let Commissioner ask you questions.

Thanks. But I did want to point out in the community participation line here that postcards were sent to 307 properties. The developer received calls from Hearsay Brewing and KeyBank, both in support. And the members of the KeyBank branch offered to provide financial literacy and educational events along with other support for future residents. And I just wanted to pull that out because I think this is what community is. And this is what is instead of just being, oh no, there's a new tall building. It's like, how can we participate in our community and make things better? So I just wanted to point that out because I thought it was actually a really great really great thing and that that we should kind of encourage or or Pull out when people do write in things that are nice Thank You Commissioner Weatherby we'll hear now from Commissioner Hammersmith then Norton then Weitsch Thank you

I agree. This is a great project. 300, and I can't remember the exact, 350-ish affordable units, and you're using TC1 zoning. Like, this is great. So I don't want my comment to, you know, but I have to say this. And it goes back to sustainability.

Because somebody, who said that this was a model project? You?

Almost, almost. So... As Mr. Garber pointed out, the gas, you don't have to do gas. And I would encourage you to look at alternatives. And I understand the appeal of gas grills and gas fire pits as amenities. But I mean, we are really trying to like to our sustainability goals in Ann Arbor, and we can't require anything. And I mean, if those aren't need-to-haves, maybe just don't have them. I mean, it would save you money, too. And then look into the batteries for the backup. Just the storm events that we keep seeing, these are all directly related to climate change. And I just feel like every little bit that anyone can do to do their part, you know what I mean? It's so overwhelming. But any little thing you can do, it'll all add up. And then I will ask the question about ERVs. Um, energy recovery, energy recovery ventilators. Thank you. Um, which are mechanical systems that keep air fresh in tight construction, which is often geothermal, um, is often paired with them. Is this a really, are you planning to have like really tight building construction for energy efficiency?

Yeah, yep, and we will have ERVs. Great. I actually, don't quote me on this, but I believe they're becoming required by code going forward. Oh, okay, wow. We're working on another project in East Lansing right now where we've been working through the building officials, and my understanding is they require our Nathan New Michigan codes. Great, great. Okay, thank you.

Thank you, Commissioner Hammersmith. We'll hear now from Norton, then Weitsch.

I want to just, not for you. This is for the public record. I honestly thought A1 Rental was no longer a going concern. So I want to amend my statement. I don't want to add to the rumors that the city is pushing A1 out. I've actually used A1 rental before. I think this is a great location for this project. And I'm very encouraged that it's designed for families. Clearly, it's not a high-rise student housing project. I wouldn't be surprised if. students end up in it. So I think this is a great place for this project, and it will fit this space nicely. And I'm not saying anything about whether or not A1 Rental is a good place or a better use. I just wanted to go on the record making that clarification.

Thank you, Commissioner Norton. You just saved yourself from me being able to talk about my many years of use of A1 rental for my crab fest, renting tables and chairs when we hosted Easter events at our church, renting cotton candy machines and popcorn makers. For me, A1 has been the place. And when people call my church and ask, For tables, I tell them go to A1. They're $1 or $3.50 a table, which is really great. They even have plates and flatware if you're doing a wedding, tablecloths, lots of things there. So he did save me from saying that, Commissioner Hammersmith, as I said it all. As you can tell, we're quite engaged in our city. We love our city. We love the local businesses that are in our city and we take seriously our responsibility here to sit the table to look at projects as they come into the city. And so that's represented by the comments and the questions that you're getting. Where I want to start first, I just want to define a term that you've been using tonight. You have used a lot of acronyms, which are fine. Some of them you have defined, but you didn't define TOD. So is that transit-oriented development or district? Okay, great. Just for those who are listening and heard you open with that, and because this is on a TC1, a transit corridor, it makes sense that this is a transit-oriented development. So thank you for doing that, and thank you for doing it inside the zoning that is already there. Let's start with the pilot. So Planner Bennett mentioned that city council approved your pilot application. Mr. Garber had questions about how that exchange sort of took place. My understanding is the city charges like the housing development, a pilot fee of $1 per unit of affordable housing. That seems to be being extended to you. Is that correct?

That is correct. Yes, that's been approved.

Okay. Do you know what your tax estimate would have been per door without that pilot?

I don't have it offhand because we've always been planning for it, but I would say it'd be significant compared to what is basically negligible at this point.

So would you say it could be somewhere in the range of $500 to $700 per month per door?

Probably a little less than that because we'd still get a credit for affordable and income approach.

So you would get something from the state, not necessarily. Or from the county.

The assessor would just assess it less because of its affordability.

So it wouldn't be what a typical student housing development would be.

Probably half of what a student housing development would be.

So about $350,000 then. Commissioner Lee, do you have any math for us before I move on? Do you want to take a minute and...

What a back-and-nack would look like is generally about $250,000 to $300,000 a door. So on 343 units, I expect this project's probably going to cost about $100 million. The assessor generally looks at the total development costs or the overall. I mean, there's going to be a lot of site costs as well associated with this. There's a ton of tremendous amount of site improvements. Generally, your math is going to be you divide it by half. You get the taxable value for the state equalized. And you're going to actually multiply that by, I think we're at like 80-ish mils for non-principal. So I would say, yeah. This is like if it was a commercial. We know all the qualifiers. Yes. This is like a total estimate. But yeah, I would probably be thinking that this kicks off $4-ish million in property taxes if this was just straight assessed as a commercial market rate deal.

OK.

Qualified, like, very, very heavily with, like, two.

Can you give us the per unit? Just real quick.

Yeah, $12,000.

$12,000. So I was right, about $1,000 per door. And then, but half of that because you would have had the affordability if the city hadn't approved your pilot. Yeah.

It could be less than that, too. I've never run the calculations.

OK. Yeah. So that's a significant number. The other piece is, can you just walk us through, because you've offered several times. So there were a couple of comments you wanted to make. I'm happy to let you make them now. But the way that we work is the commissioners ask the questions, and then you answer. And so then I'm happy to hear if there was something you wanted to clarify that came across the table before I continue with my questions.

No, one of the big things is just the A1 rental so that they're not going to have any downtime. They are working on securing a new location. And by the time we would start on the construction, they'd basically be back up and running within a couple of miles of where they're at now. So they're not going out of business or anything like that. They were just looking for an opportunity to better use of their land and also then relocate their business.

Okay, so much to Commissioner Weatherby's point that it was not you coming to push them out, but them deciding they wanted to relocate and capitalize on their equity that they had in their property. Fantastic. I'll start with staff. Where is the R4B that they're abutting to? Because I see the daycare center, the discovery center that affronts Maple and then has frontage on Liberty. But where is the abandoned property that is the residential property?

So it's Kitty Corner.

I need some landmarks. Sorry.

So it's directly behind. Okay. So let's go to the corner of South Maple Road and Liberty, the corner lot, which is not their lot. It's the lot immediately west to them. Okay. Behind them. is R4B. So it's not immediately, it's not directly behind, but their property lines do touch at this corner. I mean, I could share my screen if that's helpful.

Yeah, could you, I'm sorry, I was just struggling with it, and I understand that you're doing what we've asked you to do, but it was kind of striking to me. And did you reach out to the property owners to see if you could acquire the property so you could rezone it so you wouldn't have to taper down?

I did not. No, it's currently a stormwater pond, and it's half zoned as P and half zoned as an R district. Right.

Sorry, I'm not in the Zoom meeting. So you cannot. All right. No, Mr. Kelly can share their screen.

Oh, OK.

So it's this pond.

This is their parcel.

This is the parcel of the property in Clark. I have turned on my mic. Property in question is where my cursor is, and this adjacent corner is this zone is R4B, all of this.

Gosh.

So that is the connection.

This was not the antenna TC1. Okay, so... Because there's not a property there. Would that have had a material difference on the development that you have made? Would you be able to have gotten more units in because you didn't have to taper down?

Yes, we could potentially get more units. And this comes to the balancing act. So we started on this project a little over a year ago, actually. And so the markets have changed substantially, again, with the Iran war going on. Interest rates have climbed. And I just watch my loan proceeds erode daily, unfortunately. Sure. And then equity pricing has come down, too. And when you get to this size of development, there's only a certain number of equity investors out there that can invest. This is typically the big banks you see across the country, the U.S. banks, Wells Fargo, Bank of Americas, J.P. Morgans, and things like that. So you have a limited pool of investors in that piece. So going too much bigger gets really hard to do.

So you wouldn't be able to, given the current market conditions, to take advantage of any additional development opportunity for housing. So your financing would prevent you from improving. So there's nothing... So I think what I'm getting at is... I'm seeing something in development that comes across the table that seems to trade housing for something else. So it may be height. There's a sense that too much height is bad here. So we are going to trade floors, which to me is housing units. so that the height is more palatable but it sounds like even if we had resolved this issue in zoning you would still be constrained given your capital stack to produce the development that you are presenting to us now correct we probably likely wouldn't have went any higher um and just as a background to um our building is a concrete podium with cold form steel above so cold form steel is kind of in between between wood frame and concrete don't turn around mr mr garber's making a face go ahead

Yes. In wood frame, you can only go up to 85 feet total, eight stories. So it triggers this new thing. So it does get difficult to switch into this product type. We've looked at these size developments at other locations too, but typically at 200 units, it doesn't work. You need to get those bigger economies of scale to make them work to venture into that new or the upper construction material.

great and i didn't say this at the at the start of my comments because we were talking about a1 uh is one i thank you for bringing this development uh to us thank you for getting started at a time where you could maximize your capital stack so that the map that you started under is now gone so you wouldn't be able to come today to start this project anew so thank you for your foresight and your willingness to come and develop and to create these homes for folks because they are much needed in our community Just my closing question would be, can you just, as much as you are willing, just walk us through your financing. How are you able to do over 300 units of 100% affordable housing at what, 4%? So you're using the MISTA of 4% plus the environmental reinvestment on top of that and so help us understand how much of the development is coming out of those that benefit the pilot which apparently is going to save you four million dollars a year over the life of the property then help us understand how much are your equity partners contributing and if there's any development fees that you are retaining or reinvesting back into the property

Yeah, so to start off with, we'll probably say the bonds. The bonds helps our debt. So we actually were awarded bonds in June from MSHDA. We have to go to a final board hearing before we close and everything like that. But we got our inducement-realized solution at that time. With the debt side, the pilot is a huge driver. In most any affordable housing deal, you need some sort of property tax relief either through TIF or pilot or some other remedy that some cities or states have. So we are probably about 40% 45% debt or equity. Equity pricing has went down significantly since last summer. Typically, credits are now selling in the low 80s to 70s, mid 70s, somewhere in that range, where previously they were in the high 80s to mid 80s. So that every dollar of tax credits or equity you lose is critical. But I'd say our tax credit equity then is at 40% to 45% as well. And then when the investment tax credit is a small number, I think it's only about 2%, it'll probably be a couple million dollars in investment tax credits. And then deferred developer fee. We're going to probably in today's world defer most all of our developer fee into the deal. And MSHDA sets the standard fee and then you charge that to the deal. And it's basically in the affordable world you're trying to solve trying to pay some developer fee and it's not easy today.

So you're going to defer that so that you can realize it on another property in the future?

Yeah, so the deferred developer fee, the way it works, it gets paid out of cash flow. So basically, you get paid a certain chunk up front, and then during different milestones during construction and stabilization, and then whatever's left gets deferred, and you have to pay that off in your 15-year compliance period. So realistically, all your cash flow is just left pocket, right pocket coming in as developer fee.

Okay, great. I'll turn back to my colleagues to see if there are any clarifying questions. Commissioner Adams? Commissioner Lee? Great. Are we ready to vote? Manager Kelly, would you please call the roll? Thank you so much.

On the motion as presented with conditions, Weish?

Yes.

Hammerschmidt? Yes. Adams? Yes. Dish? Yes. Mills? Yes. Weatherby? Yes. Lee? Yes. Norton? Yes. Bass Uni? Yes. That carries.

Thank you and good luck. That takes us to 11A, Other Business. There is none. Finally, to agenda item number 12, Public Comment. This is a second opportunity for anyone to speak up to three minutes. So students who have been here taking notes for your papers, this would be a great time for you to ask questions. For any individual to speak up to three minutes on any issue, we'll first hear from those of you who are present with us in chambers, then we'll turn to remote participants if we have any. To speak remotely, press star 9 if on phone or use the raise hand feature if on Zoom. For phone access, dial 877-853-5247 and enter meeting ID 977-6634-1226. City staff will identify callers by the last three digits of their phone number or by name if on Zoom. For all participants, excuse me, you will hear an announcement when it's your turn to speak. Please move to a quiet area and mute any background noise. For all participants, whether in chambers or online, please state your name and address at the beginning of your comments. Is there anyone present who would like to address us at this time? Yeah, come on out. Yay!

Hi, my name is Melanie Nolan. I live at 551 South State Street. I'm a student at the University of Michigan Law School. I was curious what local government issue you guys think is the most important for younger people to care about as we're attending this meeting as a part of our local government class.

Great. So we can't answer that question now, but I will give the commissioners an opportunity to answer that question after the public comment, because this is your time and we don't take any of your time.

my comment okay thank you for having us this is such an interesting meeting and it's nice to see people be so engaged about the issues in our community great thank you no mister no okay still no remote participants

All right, great. So I shall close the public comment and move us to agenda item number 13, commission proposed business, which, you know, giving the discretion of the chair, we can respond to the question that we were asked, if anyone would like to start. Do you want to come back up and ask your question again so that we have it? Well, it's hard. We're all listening to figure out whether we have to say anything, and so we stop keeping track.

Do I have to say my name again? No. My question is, what kind of issues in local government do you think are the most salient for younger people to care about?

That's a really good question. Who would like to start? Oh, Councilmember Dish is nominating Commissioner Adams to start us.

The role of process in the process. So we've built, and we're part of it, we've built this huge superstructure of stuff that runs all the time and it slows up or speeds things down depending upon how it's set up. The question that we never ask is, is it improving outcomes or is it improving legitimacy? What is it doing? What work is it doing? And, you know... This meeting is an excellent example of that. You just heard a very lengthy discussion around a site plan that complied with the law and could have been approved in a few minutes. So the question you might ask is, what did that discussion do? Did it improve the legitimacy of the outcome? Did it improve the quality of the outcome? And that depends on your perspective. I'm not going to put my hand on the scale and suggest how you should think about it. But as a law student, I think those questions about, like, what are we doing here tonight can be asked about just about every process that runs within the city. And we do not ask those questions enough in terms of right-sizing the process and getting the outcomes that we want.

Thank you, Commissioner Adams. Commissioner Weatherby.

I would agree with all of that and also I think understanding what is happening like coming to meetings or when I said you know there are there is a lot of people think that the city has a pool of developers who want to build something and that the city is chooses a spot for one of their pool of developers to build. That is not at all how it works. If I want to sell my property to a developer, the city is not part of that in a lot of ways. There are rules and regulations and there are things, but there's a lot of angst and a lot of stress that people have and are kind of led down paths of what they can affect and what they can't affect in in development and in in the in sort of city building and people spend a lot of time worrying about things that Kind of when they come in here. We just say yes because it's legal. It's it's what we should be doing and there's a sense that their contribution isn't useful, but it's usually just because their contribution has happened at the wrong time or with the wrong person, that when a project gets to us, it is far down the road, and it is, people can affect it. I know Mr. Garber which is he wasn't the only person, but he does affect things, and in a good way. We listen to him, and so, you know, you really can affect what happens in your community. You just have to understand where the best place to spend your energy is and the time, and that's doable, but it is kind of... It's difficult to know. And showing up to a planning commission is fabulous, and it's really helpful for you. That's how I got started doing this, was coming to yell at people on planning commission. And that is a lot of times where people start is they're really concerned about a project in their neighborhood, they own or that they are affiliated with and that's what gets you in the path of like understanding what actually happens but i really admire all of you who are showing up when you you don't you know when it's just kind of an open field and and you just want to know more and that's awesome thank you commissioner weatherby commissioner mills

So the first answer that I was going to give is about property taxes and that I feel like the public generally doesn't understand how city governments are funded and that they are really constrained in terms of revenue creation. And that's a system of funding a local government. And the Ford School does a really cool survey that talks about this. But you actually asked about what young people should care about. And it was my little young people that snuck out the side so they could go home and get ready for bed. And I mean, they care about climate. And that's what I think about a lot. And so many of the decisions about how we address climate action locally happen through land use. And that looks different in urban places than it does in rural places. And so in rural places, it's very much like building a lot of the power plants, the clean energy power plants of our future. And in urban places, what that looks like is building attached units. And in places that are walkable, so that our entire energy system, like our entire life, takes less energy. And so that's not necessarily something that is visible. And particularly, the fact that attached units are easier to heat is not what people necessarily think about as climate action. But that's things that happen at this table about where that's allowed or required. And I think that that's really, at least for my little people, like that is something that's really important to their future.

Thank you, Commissioner Mills. Commissioner Bassuni.

Hello. OK, yes. Thank you so much for coming tonight. And I love this question. I think I am now craving that all of our meetings end with kind of a 30,000-foot view question. Because I think we're really down in the weeds, very technical. And then I don't know. This is a lovely way to end our meeting. So thank you for that. So yeah, my background and formal training is as a scientist, so I'm not an attorney. So that being said, to my untrained ear and eye, legally speaking, I do concur with Commissioner Adams. I think a lot about the scientific method and the scientific process and how do we approach questions, how do we communicate that to people who are not specialized. And I think understanding the process of government and governing and what that looks like is essential to understanding, yeah, like Commissioner Weatherby was saying, where certain topics, issues, and I don't know if the correct term is pressure points or areas where something goes from one department to another. Understanding where those crosses are is really hard just generally, even for someone who's specialized in public administration. And so for someone who's coming from the community who doesn't have that specialized information, it can feel very daunting. And to your question about what's the most important local government issue for young people to think about, I know for me, I'm in my late 30s, but I'm relatively younger, so I'll take it. I think for me, it's community engagement and education. a theme, but questioning who is engaging, what type of education is being where it meets people. Because I think sometimes it's understandable to err on the side of, well, more community engagement, full stop is best. But there is a growing body of evidence that the people who show up to charrettes and meetings and other ways to get that community engagement, it is fundamentally not equitable because it is a downstream outcome of these huge structural and historical inequities we as a society have had. And so I think for me, that's a really important issue for people to understand regarding local government. And that also aligns with where elected officials' purviews end and where people who are nominated, appointed, there we go, where those boundaries are. And then the last thing I would kind of allude or link in is I almost think it's like a reverse way of thinking about it. Not that what local government issue is most important, but what do individuals value most? So is it sustainability? Is it housing equity and advocacy? Is it public health? What is it? And then find an entry point into local government in some capacity because there are so many entry points. Earlier this year, I did the community academy through the city of Ann Arbor. So it's an eight-week program. Once a week, we came into this room. And we learned from different departments what their purviews were, what their strengths, weaknesses, what they needed. And that was really eye-opening to see that there are so many entry points for people who want to learn more and better understand how their local government operates and the restrictions they operate under. So that's my very long answer to your wonderful question. So thank you.

Thank you, Commissioner Basciuni. All right. I'll throw my hat in and wrap us up. So for me, I think it's about land use and it's about tax revenue. And I often just say it's about math because math drives so much of what happens and what is... permitted in a community. So when the land is dedicated to a very specific use like single detached homes that especially in a state like Michigan where the longer you own your home the sort of the cap of your tax rate sort of is proportional to that so it robs communities of tax revenue which then allows that community to do the work that it needs to do to make whole community and so this is my I think fifth or sixth year sitting here at this table having been appointed and I'm grateful to sit here because it's helped me understand how the city works because everything that happens in the city except for what the city does passes through this table and it's surprisingly a very important place it is a process oriented place And it has been used, as Commissioner Bassiouni has said, to prevent people like myself from being able to be landowners and equity stakeholders within the community. But there are really incredible things that we can do here at the table. And you actually heard it, even though we've been at it for about two and a half hours. We had a developer who has come in who told us one thing and then did another. And when they came back, they corrected to make sure that what they were presenting to us today was not like the thing they presented to us in the past. And other developers read the table. They pay attention to what's on the table, what are the things we're talking about. So car storage, which is a huge, I think, misuse of land. We care a lot about housing, and we care a lot about affordability, though we don't have the right lever to create the affordability. But we can ask the developer. So the process question that I was asking was, we created TC1. We have a step down as it approaches residential, but it abutted something that doesn't actually have... a home on it, but it's zoned that way. And that had a demonstrative impact on that developer. So understanding how we write those codes, how we plan the city, I think is a very important place to get started because it's ultimately about the future. I'm housed, I'm very comfortably housed. And so I'm not at any risk. It's what does your housing look like? What does your potential future look like post your completion of your degree if you wanted to stay here? Could you afford to stay here? Could you find employment here? And all of that flows through land use. So that would be my recommendation. And thank you so much for coming. And thank you so much for your joyful question.

hearing from you all. Have a good night.

Yeah. I will entertain a motion to adjourn. Moved by Commissioner Adams, seconded by Commissioner Dish. All those in favor, say aye. Aye. We are adjourned.