Mayor Christopher Taylor:
DC-8 resolution to inform next steps regarding the city property located at Ashland. William move by Council Member Radina, signed by Council Member Briggs. Discussion please of DC-8 Council Member Radina.

CM Travis Radina:
Thank you, Mayor Taylor, and thank you to my colleagues for entertaining this late addition to our council agenda this evening. For me, and I think I can say for my co-sponsors as well. This resolution is pretty straightforward and process driven. As noted in the resolution as early as 2019, the city property at Ashley and William was identified as a site for potential future development.

Earlier this year, Mr. Dohoney adeptly suggested to council that the site was worth exploring further. And since then, while Council hadn't really had an opportunity to discuss it further, it became clear that there was demonstrated interest in the site, including through an unsolicited proposal from an interested developer that the city received this fall, possibly because the city has has relatively few publicly owned properties which could be subject to this type of proposal.

We, unlike other cities that have considerably more publicly owned parcels, have never developed a formal policy on exactly how to handle unsolicited, unsolicited proposals when they are received. Personally, I believe that establishing clear processes and expectations is critically important to protect both our city and our taxpayers, and, in my view, establishing a clear public process for how to respond in these situations ensures fairness, legitimacy and transparency and ultimately strengthens public trust.

So without regard to the proposal that was received, because frankly, to date, I simply just don't have enough information to have formed a firm opinion on it. I believe it is important for us as a body through the passage of a resolution like this to one publicly state that we are in fact interested in understanding the best use of this property to support our city's needs and goals, and then to to publicly deliberate potential processes to move forward, whether it be an outright sale, an RFP or another process yet to be determined.

This resolution asks for those recommendations from the administrator so that we as a body can deliberate and align and then ask the administrator to invite the interested developer to participate fully in that process once it is established. Finally, I want to say, just as an a personal aside, that absent a formal process, I do think Mr. Dohoneny has done an exceptional job navigating this to date.

And as usual, he continues to represent our city with integrity, thoughtfulness and wisdom. I think it's exactly because of the hard work that has gone into this so far that we've arrived at a point where I believe that council needs to weigh in on how we would like to proceed. So with that, I encourage your consideration of the resolution.

Mayor Christopher Taylor:
Council Member Briggs.

CM Erica Briggs:
Thank you. So let me begin with what this resolution doesn't mean. First, it's definitely not a rebuke of Administrator Dohoney. It's clear from his recent performance review that Council believes he's doing an outstanding job and that we have great faith in his leadership. And second, it's not a rejection of the concept that was brought forward of a hotel and conference center space.

Rather, it is a recognition that we have a responsibility as council to establish policy. We should not be led by development interests, but instead lead and work with the community to establish a clear vision and plan to ensure our downtown is healthy in the future and that we have the financial resources needed to address our community's needs and priorities.

This site has significant history in our city. We have wrestled for decades about what to do with these parcels, in part because we recognize how much the site can shape the future of one of our most beloved parts of our community and the Fifth Ward. The historic downtown Main Street area. For years, we've had a stated goal of increasing housing downtown because we know that many that more downtown residents are essential to a healthy downtown.

In 2021, we undertook an extensive planning process led by the Ann Arbor Housing Commission, and residents articulated a desired vision for this site. Through that engagement process, we learned that there was a strong desire from residents and stakeholders to maximize affordable housing and developed mixed income housing on the site to activate the ground floor for public benefit and to consider the needs of downtown businesses.

However, when Administrator Dohoney made the recommendation in April to consider this property as an asset that might generate revenue to accomplish important city goals, I was open to entertaining that conversation, but I anticipated that we would be presented with recommendations and coalesce around a shared vision before turning away from our most recent plans to build mixed income housing on the site.

However, the arrival of an unsolicited proposal interrupted that likely process and has us considering other uses like a hotel and convention center space before coalescing around a vision. If council doesn't support this resolution, we will continue to work to negotiate a deal with this developer. But it's difficult to imagine that we would get the best deal because we have not established a vision or goal other than generating revenue.

We haven't established why we should turn away from our previous plan to build mixed income housing on the site. We haven't had public discussions with important public with important downtown stakeholders or the public to establish the need for a convention center or hotel, nor what attributes we might want to see from a convention center. And if we proceed, we won't have the opportunity to compare this proposal against any other potential proposals because it hasn't been solicited through an open and competitive bidding process.

And as such, it would make it very difficult, at least for me, to support any deal that comes out of this process, which is also not a fair position to put a developer in. This resolution gives us the opportunity to identify our goals and vision for the site, then create a process to ensure we can fairly evaluate any development proposal and understand if it's aligned with that vision.

So I ask for your support in moving this resolution forward this evening.

Mayor Christopher Taylor:
Council Member Eyer

CM Jen Eyer:
Thank you, Mayor. So I was happy to work on this with my colleagues and I think it should probably surprise no one that I believe the principle of best value should always be applied when offering to sell any land or assets owned by the public, in this case, owned by the citizens of Ann Arbor.

As elected officials, we have an obligation, a fiduciary duty, to seek the highest and best use according to our identified needs and goals and to secure the best price for the sale of such public assets, if that's what we decide to do. The fact that the city has received an unsolicited proposal for this property certainly indicates that there is great interest in it, and I believe it should trigger an action by council to employ open and competitive competitive bidding in order to obtain the highest and best use at the best price.

It's my understanding that at the state level, when state land is deemed surplus or when there is an unsolicited bid for a parcel, that an RFP process is automatically used. So there is good precedent for us there. The last public conversation regarding the Kline Lot set a course for housing at mixed income levels on the site to address our housing, housing and affordability crises.

If we are going to change course, I believe we first need to have a public conversation about that and importantly, make a solid case for the change. I believe that needs to be done before we consider any proposal. Therefore, I worked with my colleagues to present this resolution, which asks our city administrator to provide us with his recommendations for the best use of this property to support the city's needs and goals and the potential processes to move us forward.

This would allow us to have a public discussion to either confirm or redirect the course for the property. The reasons for doing so and the process to get us there. Finally, assuming we would proceed, the process itself would allow for open transparent and competitive bidding to get us the highest and best use of the property for the best price.

Like others, I share our gratitude for the work that Administrator Dohoney and staff have done so far to vet and and work on this unsolicited bid. And and, you know, I think at this juncture, I'm most comfortable taking a pause from that course and and going back and addressing some of these outstanding questions. Before we continue ahead.

Mayor Christopher Taylor:
For my part, I am I'm extremely comfortable with staff's discussion with with SI to explore whether SI is able to put together a proposal that is, in staff's view, suitable for consideration by council and the public, and am extremely grateful for the wisdom, judgment and efforts of Mr. Dohoney in this regard, as well as the rest of the professional staff.

This question arose as a result of SI’s unsolicited initiative discussions, of course, with SI remain non-exclusive. Anyone with an alternative proposal may engage on exactly the same basis as SI is presently engaging, now. The process here is is entirely clear. If SI discussions with staff do not give rise to a proposal that in staff's view is sufficiently positive, then no proposal will come to council.

In that light then I would be happy to ask the administrator and staff to take initiative and to detail a process for moving forward. If on the other hand, and staff's collective view, the SI proposal turns out to be in a condition for consideration, then the discussion of that proposal's benefits, its detriments, its opportunity costs, its role in in our downtown and so forth.

This conversation will be lengthy, multi-stakeholder, public and entirely transparent, in part, I believe, because the resolution would disrupt current conversations and because I look forward to seeing if they can indeed come to fruition to, again, to put forward a proposal that would be suitable for complete discussion. I will tonight be voting no further discussion. Council Member Cornell.

CM Jennifer Cornell:
First of all, I want to say thank you to city staff, especially Mr. Dohoney and Ms. Kaur’s teams. I know that you've done a lot of work on this. I have a lot of questions and concerns, but I don't have any way to articulate them without speculating because we have no proposal, despite being one being mentioned in a whereas clause.

The public knows as much as council and city staff about what SI is envisioning for the site. There's no deal. There hasn't been anything done in secret. I'm not sure how things could have been more transparent as things sit today. And I want to reiterate Mayor Taylor's point that another developer, any other developer, could come to the city with a proposal, with an idea, with a notion of what that site could look like.

Receiving an unsolicited request is not uncommon in economic development. I can point to several projects in recent years due to my involvement with Ann Arbor Spark, where the city was approached by a business wanting to locate here, notably Barracuda, KLA, and Sartorius. Because we have very little open land in Ann Arbor and a scarcity that is owned by the city, These requests don't often progress with city involvement until it's pretty far down the road because a land acquisitions piece is done between a developer and a private land owner or the you.

It's important to note that in this specific scenario regarding Sports Illustrated, the foot print, the footprint excuse me, required to build a mixed use development that includes a conference center, which we know has been a priority for our local convention and visitors Bureau for at least a decade, shrinks the list of properties that could work in the downtown DDA district down to only this specific property.

In terms of engaging with business owners and community members, talking to the downtown, talking to Destination Ann Arbor and the Main Street Area Association, we know that this type of project here, specifically could have an enormous impact on neighboring downtown businesses plus benefit walkability and other things that we, I believe, hold true as values within the community. I also worry about the existing perception that Ann Arbor is a pain to do business with, and we don't have the best track record of of retaining city managers recently.

I'm not supporting this resolution because I would like to see what materializes from the work thus far and to make an educated decision as to what follows. Thank you.

Mayor Christopher Taylor:
Council Member Disch.

CM Lisa Disch:
Thank you, Mayor. I also will be voting no on the resolution but I thank the sponsors for bringing it. I’m voting no, because I want to reserve judgment about the possible development of a sports themed conference center on the Kline’s Lot until I've seen the terms of that development proposal. As Council Member Cornell said, so nicely put it. There's no proposal yet.

I see the contribution that a conference center could make to Ann Arbor downtown, and I know firsthand how central football and basketball and rowing even tubing on the Huron River, are to so many people's enduring love of and identification with Ann Arbor. Even if I myself am more a partizan of Hill Auditorium than I am of the Big House.

I also want to underscore that leasing or selling this property for private development can bring needed funds into our general fund to support vital city priorities. Affordable housing among them that we need additional resources to realize. But I'm really grateful to the sponsors of this resolution because I welcome the opportunity for us to speak publicly as a body about this possibility.

And I do also have questions that I would like to voice that will in the future help me evaluate the terms of such a proposal if and when it comes forward. I would like to receive informational memos from our city attorney and city administrator when the time is right for that about the things that we can accomplish could accomplish with a conference center on this site, and especially of the financial complexities of this deal.

And our staff is characteristically generous and thoughtful in putting together these memos. And I look forward to seeing that when the time is right. I also have questions about our goals apart from this specific proposal, which would help me think about the question whether this is a good. We can't know if it's the best. That's true because we don't know what other things we would get if if if we go with a single source proposal.

But I'd love us to talk about what our financial goals are for this asset. Do we want to maximize its value, maximize it within constraints given by other priorities, such as a commitment to carbon neutrality? What's the best way to achieve those goals? Is it through outright sale? ground lease? Does this kind of proposal give us more control than we would have if we sold the property outright?

These are all considerations that I just don't know enough about now, and I am excited enough about this proposal that I'd like us to move forward. I'd like us not to stop.

Mayor Christopher Taylor:
Further discussion? Council Member Song, and then Council Member Ghazi Edwin

CM Linh Song:
When City Administrator Dohoney brought this forward to council members, my response was that even though I am myself not a bit of a connoisseur of local sports, I fully appreciate the full market value that it brings to our city. And I love the discussion as to whether we're a city of nerds or are a city of jocks. And given the economic conditions and the benefits that we see from nearly doubling our city side size every couple of weekends and how our downtown businesses and businesses rely on sports, I would say that we're probably more of a city of sports than geeks at this point.

I you know, this resolution has given me a lot of thought in reviewing how we have used the RFP process on our public parcels. And I thought it might be interesting to think a little bit maybe about the library lot and how at one point when we did solicit RFP for that site, we had to hire a CBRE, CBRE to market that site and received nine proposals.

And I also wanted to reflect on the timeline of how that garage was built in 2009. And here we are in 2023. And if we look at the Y lot, at the Y lot when we entered a RFP process in 2003, here we are in 2023. So we can ask for process, we can look for partnerships, We can also finally at some point get to a point where we can maybe, hopefully look at a site plan.

But we are so far from actually looking at a site plan because we don't have a proposal before us. I would love to see a proposal. I would love to go into closed session and actually have general counsel review it with us. But at this point I just see some press releases from SI messages and meetings from with Mr. Dohoney in alerting us to every step that every communication he's received.

And I feel like there's more information to come, and I'd hate to delay that process. So although I understand the initiative that sponsors have taken on this, I also worry that I worry about, you know, what this sends, what kind of message it sends to folks who are looking to partner with our city. So I will be voting no.

Mayor Christopher Taylor:
Council Member Ghazi Edwin.

CM Ayesha Ghazi Edwin:
Thank you, Mayor. You know, I also appreciate the sentiment behind this resolution. I'm all about transparency. I think we are all about transparency. We're all about process. And although I appreciate that, you know, I'll say that I don't really appreciate that it was brought at the 11th hour because I think that this resolution will inevitably affect other work that Mr. Dahoney is working on.

And I want to know the impact of that. I would like to see, for example, you know, a conversation happen with an admin committee and for you guys to come back to us and tell us this is how implementing this new process will affect X, Y and Z project, because this resolution is really about allocating Mr. Dohoney and city staff's time and resources and doing other things.

So because it has come so late and because I do not have answers to those questions, I will be voting no tonight on implementing this process. At what I feel like is a last minute.

Mayor Christopher Taylor:
Further discussion? Council Member Watson.

CM Chris Watson:
I want to echo a lot of what my colleagues have said about needing more information and wanting to understand the terms of a deal that staff would bring to us before making a decision. So. So I will be voting no on this resolution. But I do want to stress that the decision to consider this lot for development, you know, for any any sort of for profit development isn't a vote or isn't a decision against affordable housing because as as we know, the city has time and again leveraged funds to to build affordable housing.

So, for example, you know, our millage gives us $7 million a year on on average to put in affordable housing projects, but that might only be the 10th of what is needed for a project as big as the Kline’s Lot, something on the downtown core. So there's not really an iteration of development on that site that doesn't include some sort of market rate development.

And because of that, our housing commission has to sort of understand how to balance all of those issues. And it could be that getting cash payment to to use in other parts of the city might net us out more units in the future. So I did want to just just point that draw attention to the fact that the the money we receive could could be more effectively used elsewhere in the city.

Mayor Christopher Taylor:
Further discussion? Roll call vote please starting with Council Member Akmon.

Clerk:
Council Member Akmon? No
Council Member Briggs? Yes
Council Member Cornell? No
Council Member Disch? Yes
Councilman Harrison? No

CM Lisa Disch:
Oh, I'm sorry, because I redo. I'm so sorry. I'm so sleepy awake and I'm not fully here, so. No was my vote? I'm so sorry.

Clerk:
Council Member Harrison? No.
Council Member Song? No.
Council Member Watson? No
Council Member Radina? Yes
Council Member Ghazi Edwin? No
Mayor Taylor? No
Council Member Eyer? Yes

Motion fails.