View Agenda for this meeting

PLANNING COMMISSION
SPECIAL MEETING
TAX BASE ALTERNATIVES ROUNDTABLE
WEDNESDAY, JUNE 15, 2005 7:00 P.M.
COUNCIL CHAMBERS - NOVI CIVIC CENTER
45175 W. TEN MILE, NOVI, MI 48375
(248) 347-0475

 

CALL TO ORDER

The meeting was called to order at or about 7:00 p.m.

ROLL CALL

Present: Members Victor Cassis, Andrew Gutman, Lynn Kocan, Lowell Sprague, Wayne Wrobel

Absent: Member John Avdoulos (excused), Andrew Lipski (excused), Mark Pehrson (excused)

Also Present: Clay Pearson, Assistant City Manager; Barbara McBeth, Director of Planning; Tim Schmitt, Planner; Mark Spencer, Planner; David Gillam, City Attorney

Developers and Guests in attendance: John Houser, Singh Development; Bennett Donaldson, JB Donaldson; Gary Jonna, Whitehall Real Estate; Pam Fleming, Novi News; Andrew Mutch, Novi Resident, Randy DeReuter, Cunningham Limp

PLEDGE OF ALLEGIANCE

The meeting attendees recited the Pledge of Allegiance.

APPROVAL OF AGENDA

Moved by Member Sprague, seconded by Member Wrobel:

VOICE VOTE ON AGENDA MOTION MADE BY MEMBER SPRAGUE AND SECONDED BY MEMBER WROBEL:

Motion to approve the agenda of June 15, 2005.

Motion carried 5-0.

AUDIENCE PARTICIPATION

MATTERS FOR CONSIDERATION

1. ROUNDTABLE DISCUSSION WITH DEVELOPERS AND THE PLANNING COMMISSION

The purpose of the meeting is to explore the topic that has been referred to as "Tax Base Alternatives." The focus is on ways to enhance the non-residential tax base in Novi, particularly in the OST zoning district.

Director of Planning Barbara McBeth thanked the business community for attending. She asked them to fill out the blue assessment form that was part of the packet and return it to the Planning Department for tabulation.

Ms. McBeth said that since the last meeting, the City has already begun working on the web pages that would further help the developers with the development process. The City has scheduled a July 13, 2005 at 2:00 p.m. meeting to discuss performance guarantees with the development community.

Chair Kocan said that at the last meeting, the developers put their comments on the record. She said the Planning Commission now needs to put their comments on the record.

Mr. Jonna said it would be interesting to get City feedback on the developersí comments.

Mr. Donaldson asked about Gateway West and wondered if it was feasible to identify which parcels may be considered part of that future district. He said that it was helpful to hold discourse with the Master Plan and Zoning Committee on a project prior to submitting it to the Planning Commission. He wished there was a mechanism that would allow a developer to discuss a project with City Council informally prior to starting the planning process. He said that it would help a developer to understand the timeline of the process, and it would be helpful if the timeline was honored.

Mr. DeReuter said that he agreed with the twenty comments found on handout. He said that the process was well-documented, but he was looking for predictability.

Mr. Houser said that the requirement of the easement and master deed reviews should be at the option of the developer.

Member Sprague wondered what steps Novi takes to get people to choose Novi, after the County brings interested parties to the table. Assistant City Manager Clay Pearson responded that the City focuses on expansion and retention primarily. He said the State has a recruitment and expansion program in addition to the Oakland County program we partner with. For example, the Incat Company Compnay is a high tech Novi company along Meadowbrook Road. The State found out the company was going to search for sites in Canada, and so the State stepped in to keep them here, with City of Novi participation.

A local Economic Development Corporation was set up initially for revenue bonds and still exists. Those bonds are not as attractive and donít get used today. It is more of a maintenance mode for that group.

The City does a series of business retention visits, and Mr. Pearson is the lead accountability, although everyone is responsible for selling Novi. The City goes on retention visits Ė Tim Schmitt and Sheryl Walsh are two staff colleagues who have attended. The City doesnít get too involved with the retail sector attractions. He said that the best thing a developer can do is to bring a prospective client in to the City at the early stages of the game. The client will give his timeframe, and the City can work backwards from that date in order to meet the needs of the client.

The City can continue philosophical discussions on tax abatements, but there is so much going on in Novi right now, abatements really arenít a part of the marketing plan. He said that the City is working very hard at full speed to keep up with what is coming through the door. He said that the City is funded through State revenue sharing and property taxes, so Novi could potentially hurt its ability to provide City services if they abate property taxes in addition to being concerned about picking "winners and losers."

Member Wrobel did not want to see the City bypassed. He noted that development is moving west. This is an attractive community. If Novi is a difficult City to work with, the developers will just go one town over. Member Wrobel said that the Cityís goal should be to make the process easier.

Chair Kocan said she understood that the primary points brought up were perceptions not with the Planning Department or the Planning Commission, but with the Building Department and the permit process. That greatly concerned her. Mr. Pearson said that the City is working on continuous improvements and maintaining City standards. The City needs to improve the systems Ė such as separating a tenant alteration from new construction Ė to improve certainty and communication. The City has recently upgraded its tracking software which should provide its employees with better information. The tracking of items should be better. He said that the proximity of the Plan Review Center to the Building Department has been helpful and having such a dedicated staff is a huge benefit.

Mr. Pearson said in some cases, it is the competition telling clients that Novi has a slow process in an effort to lure the business to their city. He said that the City met with Nordstrom, and now the City is going to meet their timeframes. Mr. Pearson said that the City cannot take incomplete submittals. The City will agree to a full and complete review if the Applicant will agree to submit a complete set of plans. In the case of legal reviews, Mr. Houserís concern, the City is still in the process of sorting that out about timing of easement submittals.

Member Sprague asked whether the planning process and the permitting process both accommodated incremental steps. Mr. Pearson said that was part of the problem. Developers want to move forward before their plans are completely approved, so they get a starting permit, then a foundation permit, sometimes a steel permit. The City is willing to do it in certain situations, but it adds to the number of reviews and steps that each project has to go through. People want to go when they have something ready to go.

Member Wrobel said he has seen positive changes in the City. Novi has to operate more like a business than a government. Novi needs to streamline, and change things when appropriate. Novi has to serve the customers, or it will be out of business. Mr. Pearson said the City strives to do all of those things, but they will not do something that might, for example, violate safety regulations. If something makes common sense, then the City does it. The City Attorney is always kept in the loop to ensure that the City is doing things in an appropriate manner. Each project has different circumstances, so the City tries to maintain the generalities. The prioritizations that came out of the Cityís goal setting session have been helpful. For instance, priority was placed on limiting multiple residential, so when an applicant brings a request for multiple, they are told of the Cityís priorities, and their request may be difficult to accommodate, although they are certainly welcome to try.

Member Cassis said he would take Member Wrobelís comments one step further and state that the customer is one of "us." They own a property, that makes them a Novi property owner. Member Cassis did not want to see the property values reduced. This City is modern and has an "attitude" and the developers do appreciate that. They want to come into this community and put their roots down. They find themselves being rewarded for coming into Novi, because of the kind of community it is and the high standards it has.

Member Cassis said that the City used to have informal meetings with the developers to discuss how to improve the process. The City needs to have more of these meetings. Member Cassis said that the description of this roundtable meeting suggested that tax base alternatives would be discussed. He did not think that what he was hearing described that at all. He encouraged the meeting to return the tax base alternatives discussion.

Chair Kocan said that someone had asked how a project could get exposure before City Council. Chair Kocan said that just recently a project was brought forward as a "Special Report" at a City Council meeting. In this case, the City Council was divided on the concept of a DDA. That input from the City Council made this situation clearer for the developer.

Chair Kocan said that the Planning Commission should recommend things to City Council as a result of these meetings. Increased height has been discussed, but where should this be considered? Taller buildings next to residential will not fly with Chair Kocan. Signs are also a consideration. What does City Council want the Planning Commission to do about signage? Is the City going to back away from one sign per building? Is the City going to allow larger signs? The Implementation Committee and Planning Commission should not spin their wheels, working on Ordinance amendments, if the City Council isnít going to pass them. The Planning Commission needs direction. The City needs different signage. Does the Planning Commission have specific recommendations? She said that she can tell when she is in Novi, because it looks nice. However, it is difficult to locate businesses. She would not be willing to give in to everything. She did not want Novi to become Southfield. She did not want to increase all the building heights and add hotels. If there is one location that is amenable to this, then these changes could be considered for that area. She was not looking to do an across-the-board change.

Chair Kocan said the City cannot allow certain businesses next to other certain businesses. The City can be proactive in making changes, but each district must be considered. There again, she said, the City is getting caught up in micromanaging. The City needs to make sure that the districts are compatible. The height chart has pockets. This needs to go to Master Plan and Zoning Committee, Planning Commission, or City Council for review. For instance, the area along Grand River and I-96 between Beck Road and Novi Road might be able to accommodate greater building heights, but she didnít know if the City was ready to make that decision yet. She would like City Council consensus on these issues, not just one Council member expressing him or herself.

Chair Kocan did not think it was fair for projects to be fast tracked blessed at the City Council level that had not met the intent of the Ordinance, especially because other developers arenít given that same treatment. She wondered if there are legal ramifications for the City when that happens. Chair Kocan asked Ms. McBeth to comment on the project that most recently went before City Council for discussion.

Ms. McBeth said that the Main Street development came before the City Council and presented their plans for the future of that development. In this case, the appearance before the City Council was for policy clarification Ė would the City support a DDA for this section of the City? She agreed that there really isnít a tool in place to get projects before City Council in the early planning stages. She argued too, that more planning decisions are made by the Planning Commission than by the City Council. The Applicant can always go before the Master Plan and Zoning Committee for feedback. There are also concept and pre-app meetings that an applicant attends.

Chair Kocan asked for a further description of how a plan moves through the process. Ms. McBeth responded that an Applicant first comes forward for a concept meeting with a member or members of the Plan Review Center. At this time, the Applicant may only know what it is heíd like to do Ė he may not even have the rights to the land or have a siteplan yet. Twice a month, on Tuesdays, Mr. Pearson attends the Staff and Consultant meeting to discuss which applicants and projects have come forward. These Tuesday meetings allow for the exchange of ideas between City Administration and the Planning Department and its consultants.

Mr. Jonna said that realistically, if the City can capture these incoming projects, that is economic development. He said that the City needs to ask itself, how can it make the process better? How can it market itself as business-friendly? He gave the example of the traffic updates that are on the computer; he said that they were a great example of helpful information. He suggested that the City consider an online planning newsletter that discusses projects, text amendments, etc. Success stories could be showcased. He said that the City has to shatter the perception that it isnít business-friendly. Mr. Jonna believed that all of these things work together, and that they will have the same results as tax base alternative ideas.

Mr. Jonna said it would be helpful to the City if an applicant was asked to complete a questionnaire at the end of his process, rating the experience and asking for suggestions. He gave examples of the process that seemed heavy, e.g., City Council approval of the Storm Maintenance Agreement. It is time consuming and happens after the Agreement has already been reviewed two or three times. He said that subsequent reviews should not take as long as the Preliminary Site Plan review.

Mr. Pearson said that that major projects like Catholic Central, Expo or Nordstrom would be welcome in any city. He said that whatever the City puts out on the web has to be more than just fluff, there needs to be substance with concrete examples. Now there are some good projects going on here. He once heard someone say that economic development is whatever the customer says it is. He thought that was a true statement. The City Council and Planning Commission are charged with, to some extent, deciding which project is more "special." There are some unique community projects that pay huge dividends, like Catholic Central. Mr. Pearson did not think that everyone understood the benefits of having that school locate here. Education is a huge component. Executive housing is a big part of attracting businesses, and why do executives choose Novi? One reason they choose Novi is the school systems. He said that there are a lot of Providence officials that will be moving into Novi. Miracle Software and Sallie Mae are examples of other important projects that came forward recently.

Mr. Donaldson suggested that the best way to overcome the perception that the City is difficult to work with is to make the process transparent. There is a lot of old baggage that the new Administration must deal with today. Chair Kocan asked him if he were willing to say that the City isnít as difficult to work with as the perception would indicate. Mr. Donaldson clarified his position that working with this City is indeed difficult. Chair Kocan summarized that the City needs to confront the perception and make headways in that area. Mr. Donaldson responded that if the review is going to take sixty days, then the City should tell the applicant that. If the building review is going to take thirty days or ninety days, the City should tell the applicant that. People can handle the truth; the City just needs to tell the truth.

Member Sprague felt that there is room for improvement in communicating and in the process. He said that a lot of work is done on the Committee level that people donít know about. He did not know how much each Committee was getting accomplished now since there are so many plans to review. The Planning Commission needs the direction of City Council, and sometimes trying to get something done really does speak to the relationship between these two bodies. He has been to one joint session with City Council, which he thought was great, but did not know what really was generated from it. He thought that the Master Plan and Zoning Committee offered a great forum for people to banter ideas about. However, while that structure is nice, it doesnít work if the Committee is bound to a comment as a result of that structure.

Member Sprague said that the whole point of economic development or alternate tax base, the City has already accomplished with the OST zoning district. The product is pretty good, and the City should market it. That is where the focus has to be. That is the tax base for the community. It has been set up, now the City has to make it work. He understood that the Cityís focus has been on retention, now the City has to do something to reach out and get the OST built out. Those are tax revenues that the City is counting on. If it doesnít get built out, the City has a big hole in its long range projections.

Member Sprague said that although the Planning Commission knows the Ordinance, the developers probably know it better because they have to live with it. That is why it is important that developers offer suggestions on how the Ordinance can be improved. Member Sprague said that the City needs to provide customer satisfaction. He said it is not particularly fair that a developer has to reach out to a City Council member to be heard. There is too much uncertainty. What counts is certainty, no matter what size the project is. If a review is going to be thirty days, then the applicant should be told that. But, the City canít say thirty if itís really sixty; an applicant canít move the tenant into a building if he doesnít know when the building is going to be open. He canít know his costs if he doesnít know his timelines. Anything that the City can do to improve certainty will improve the process.

Ms. McBeth noted that the developers who came to this meeting represent those most familiar with the Ordinance. She said they are all familiar with the OST Ordinance. She asked them to comment on missing items or out of line standards.

Mr. Donaldson said that abatements were discussed at the last meeting. He wished to point out that abatements are important for the technology-driven business. It would be helpful if this City could be on par with other communities that offer something to this segment of the tax base, which Mr. Donaldson suggested is the type of user this City wants.

Member Cassis said that land is becoming scarce and more expensive. He asked what the developersí suggestions were for increasing the tax base. He said that the City needs feedback on the idea of building taller buildings to reduce costs and maximize the Applicantsí returns.

Mr. Jonna said that the City could look at the possibility of allowing four stories instead of three for certain areas. He said that the sign Ordinance could be looked at to see how it functions in the OST district. He said this is a dynamic community with a fast growing population. Developers look at emerging demographics, and because this is a desirable place to live, developers are competing to be here. That is driving the cost of land up, but competition is good, and the market will seek out its own balance. People who come here have done their homework and have reliable information.

Chair Kocan suggested that this could be the forum in which to have a joint Planning Commission/City Council meeting. They could discuss allowing greater heights in OST, changes to the Sign Ordinance, etc. Chair Kocan said that over the years that she has been on this Planning Commission, they have sent four communications to City Council, e.g., a beautification memo, and they have never gotten a response.

Mr. Mutch said that the Planning Commission looks for direction from the City Council because they set policy, but more often than not, the Planning Commission doesnít feel like they get any direction. It would be effective if the ideas were laid out specifically for a joint meeting. One example that could be listed is the technology abatement, even though Mr. Pearson suggested that it was not a policy that the City is interested in adopting, but at least it gets the idea out there for discussion. City Council might think that perhaps it is something they want to re-evaluate. Mr. Mutch said the Planning Commission should give the City Council lots of options and then they can ask them on which of the ideas would City Council like the Planning Commission to act. Too often the Planning Commission asks for direction, but not enough specifics have been given, so City Council does not respond.

Mr. Pearson suggested that the blue comment form was a good vehicle for collecting information, and that forms could be forwarded to developers that havenít yet turned one in. The information could be compiled from both the Planning Commission and the development community for the City Council to review.

Chair Kocan said that if there is going to be a discussion of allowing additional stories on buildings, the height of each story must be discussed. There is a big difference between fourteen-foot stories and eighteen-foot stories. She said that the City needs feedback. Does the City need to allow a seven-story building in order to get certain businesses? She said certain things canít be done adjacent to residential. Itís a compatibility issue. The Planning Commission needs to be more specific. Some ideas brought forward by the developers are out of the Planning Commissionís control; it is more of a Staff decision on whether it is something that needs to be done. Once the list is made, the results could be categorized Ė Master Plan and Zoning Committee, Implementation Committee, Ordinance issues, etc. The Planning Commission could look at this list and decide if they want to edit it.

Ms. McBeth agreed that the list could be arranged by categories. She could try to have this accomplished by the next Planning Commission meeting, but she cautioned that there is already an accelerated timeframe put in place by City Council.

Mr. Spencer said that it would also be helpful to take the suggestions provided by the developers and create some pointed questions that would help garner more feedback. For example, ask the developers directly what building height they thought was appropriate for Location A, Location B and Location C, etc.

Mr. Pearson said that the focus should remain on OST, which is the Cityís bread and butter. This should alleviate Chair Kocanís concerns about adjacency to residential. Building permits and tenant buildouts were also noted, but Mr. Pearson suggested that the focus be on Ordinance-related issues and OST.

Mr. Mutch also said that there might be new uses coming into the market that should be accommodated in the Ordinance; these uses should be explored. Mr. Mutch also said that parking could be reviewed as well. Parking lots donít add to the value of the building. Perhaps the City could consider alternatives to the parking requirements. The City could be proactive, instead of waiting for something to present itself before the Ordinance is reviewed.

Member Gutman said that he was discouraged to hear that the City isnít always on the same page as the developers. He wondered if the City was losing opportunities. Is the market such that developers can build speculative offices? His company is not building speculative Office/Technology. Since there are long term goals surrounding the OST district, Member Gutman wondered whether short term tax abatements would be a catalyst and should be considered.

Member Cassis said that he has always been intrigued with the comment that, "OST is the best district for the City." He considered much of the Cityís OST as vacant or vacated. He questioned whether that is really better than building residential. Residential is occupied, paying taxes, and the residents are happy.

Member Cassis also said that with the introduction of computers, will office layouts change from offices to cubicles? Is so much room really necessary, as it was before? These are ideas that need to be discussed. He said that Novi must be a community that stands the test of time.

Mr. Jonna said that Matt Sosin was probably the most aggressive speculative office builder in Novi. He said that in order to be competitive he had to have buildings ready that could meet a tenantís delivery schedule. Not every builder has the luxury of running his business in such a manner.

Mr. Jonna said that the land in Wixom is 50Ę to $1.00 lower per square foot than Noviís land, and their project review fees are about 20% less than Noviís. This all translates into the lease rate. There are tenants who donít mind locating three miles down the road. He also agreed that there are competitive issues.

Mr. Jonna has built some speculative buildings, but it is tough when there is a soft market. The market goes in cycles, though, and no City can react to that economic cycle. Mr. Jonna said that there are no set answers but he appreciated the City bringing the developers together to have this talk. He said it will lead to good things. He said there are perhaps three or four areas that have been identified and suggestions have been provided. Mr. Jonna told the Planning Commission that they could take the initiative and pass a resolution and make a recommendation to City Council.

Ms. McBeth said that she would compile the notes and minutes from these meetings. She would work with the information to come up with a more refined version. There is a timeframe stipulated by the City Council in having the summary returned to them for review.

Chair Kocan said that maybe the information should be forwarded to City Council with the invitation to have a joint meeting to discuss the items further. She said it was the purview of City Council to determine which direction this City takes Ė joint meeting including or not including the developers, or other means.

City Attorney David Gillam added to the discussion that there are ways for applicants to get City Council feedback. There are subcommittee meetings at the Council level. There are joint subcommittee meetings. Those meetings are exploratory and make no promises to the developers. Proposals typically go through the Planning Commission for their approvals, and some go through City Council for their approvals; it is important to understand that the decisions and approvals made must be consistent with the standards and criteria set forth in the Ordinance. There is no problem with creating additional avenues for input, but the City has to make its decisions as set forth in the Zoning Ordinance.

Mr. Gillam said that there are commission members who are influenced by City Council comments and there are those who are not. Some people may not endorse the concept of preview meetings for this reason. The important thing to remember is the Ordinance must be upheld.

Chair Kocan said that sometimes the Planning Commission and the City Council arenít on the same page. She said that she looks to be fair to the Applicant and the only way to do that is to uphold the Ordinance. The City Council looks at the project and determines whether the Ordinance is more important than the project program. She did not see that as her role. City Council has to take their review to a higher step. They are held to a higher financial responsibility to the City. She stated it was their place to make policy decisions.

Mr. Gillam agreed. The role of the Planning Commission and City Council are different. In any municipality a certain level of tension exists between the two bodies. When there is a discretionary call to be made, the Planning Commissionís role is to uphold the Ordinance, but the City Councilís role in the process is to determine to what extent upholding the Ordinance is in the better interest of the City.

Mr. Jonna said that it was important for the developers to understand what tools are available to them and who facilitates those discussions. Chair Kocan asked whether he meant the appeals process. Mr. Jonna responded that he was referring to Mr. Gillamís comment that there are methods in which an Applicant can get feedback from City Council. He gave the example of Main Street not wanting to put hundreds of thousands of dollars into their project without knowing the Cityís position beforehand.

Mr. Pearson said that not all projects require policy clarification. The Main Street discussion was more directed at the Cityís position on DDAs. Itís not really the role of the City Council to preview specific projects otherwise. There are nine separate opinions that come from the Planning Commission and there are seven that come from City Council with a "concept." It should not be a goal to have all of those opinions will line up on the same page when it comes to decision time. He recommended that the process remain that City Council makes policy decisions, the Planning Commission makes recommendations, and Administration carry out those decisions.

Chair Kocan said that one discussion point is whether a Planning Commission member should be present at concept meetings. From a legal standpoint, this is not a good suggestion because an Applicant may think a comment made by the Planning Commission member represents the Planning Commission as a whole. She noted that the Master Plan and Zoning Committee has four members who may give a unanimous positive recommendation, but the nine-member Planning Commission may turn down the plan. She asked that Ms. McBeth include the question, "Would City Council consider a subcommittee for concept plan review?"

Mr. Pearson did not really endorse the concept. He said that the City Council is the policy maker, and putting them into the review process without a basis could add more uncertainty. Informal comments have no real bearing, and it adds another step and more time to the process. This community will last for hundreds of years, and the Cityís position today is that it is not going to try to position itself as the "lowest cost alternative," but a very high quality place. The City treasures wetlands and woodlands and wants to be a green community. This position works for some developers but may not for others. The certainty comes from the Ordinance, and Administration enforces that and looks to the Planning Commission for support.

Chair Kocan thanked everyone for attending.

AUDIENCE PARTICIPATION

No one from the audience wished to speak.

ADJOURNMENT

The meeting adjourned at 8:50 p.m.

Transcribed by Jane L. Schimpf, June 21, 2005 ________________________________________

Date Approved: July 13, 2005 Angela Pawlowski, Planning Assistant Date