Broadway Village at Lower Town

Official Policy
December 2002 

The Ann Arbor Area Chamber of Commerce is pleased to offer our support for the proposed “Broadway Village at Lower Town” project.  This project incorporates in a practical way many of the goals the Chamber has supported on a conceptual basis in recent years, including high density development of inner city areas to alleviate pressures for sprawl, and the use of a Brownfield Redevelopment Authority to facilitate clean up of contaminated sites.  The project also is designed to maximize convenience of alternative forms of transportation, and includes a significant component of affordable housing.

The project provides 593,000 square feet of new space, including 186 residential units, ground floor retail spaces, a major fitness center as an anchor of the development, and office space.  Parking will primarily be provided underground or in a parking garage.  Public amenities will include several plazas and parks, restored access to Traver Creek, and high-quality and varied building designs – not to mention replacement of the vacant and obsolete former Kroger/CVS and the surrounding buildings, and clean up of significant on-site contamination. 

The contamination is a likely cause of discussion during city approvals, not because of any disagreement with the clean-up goals, but because the project is made financially feasible by a tax increment financing mechanism under the City/County Brownfield Redevelopment Authority.  This mechanism captures increases in taxes resulting from new development (similar to a downtown development authority), and uses the captured funds to reimburse a developer for up-front costs for clean up and other public improvements.

The City owes its citizens a careful review of the financing proposed for the clean up, since it does represent a theoretical loss of City revenue until the mechanism expires (in 25 years).  Assuming the numbers appear realistic and fair to all sides, however, we would urge the City not to get tempted by the even more theoretical and remote possibility that a developer will emerge to create a similar development without the tax increment financing.  A development such as Broadway Village represents an enormous risk to the developer, especially since the costs are all up-front and virtually guaranteed to occur while most of the revenue is later and much less certain.  This particular area has been underutilized and run-down for years despite Ann Arbor’s general real estate boom, which suggests that the challenges of redeveloping this area are formidable. 

It is also critical that the City reviews and approvals occur in a timely fashion.  It is far too easy to review innovative ideas to death, often while sliding in additional requirements that make the whole development prohibitively expensive.  Time is indeed money in the business world, and we understand that this project faces some significant deadlines in terms of assembling the parcels of land.  Based on what we have seen, it appears the benefits of this development to the community will be substantial, enough to merit our support and hopefully the timely support of City officials.