Title
Resolution to Approve an Amendment to the Fourth Avenue Reconstruction Project Budget (increase of $1,120,420 to $6,365,020) and to authorize execution of associated contracts.
Memorandum
Attached for your review and approval, please find a resolution to increase the Fourth Ave Project Budget and authorize the execution of associated contracts following an increased grant award.
This budget adjustment is due to the following changes:
• Revenue: The DDA has received an additional $1.7M in RAP grant funds. This funding allows us to expand our public art scope and increase the percentage of the project cost that is offset by grant dollars.
• Expenditures: The Fourth Ave Project budget is being adjusted to accommodate expanded public art, retractable bollards, and the planned partnership with the Ann Arbor Housing Commission for their 350 S. Fifth Avenue site. The estimated cost of these adjustments is included below.
Background:
In March 2026, the DDA Board established a Fourth Ave Project, approved a construction contract with Fonson Co Inc, and approved associated cost-share contracts. In June 2026, the DDA Board approved an amended MEDC RAP Grant Agreement to accept an additional $1.7M in grant funding. It is now time to adjust the Fourth Ave Project Budget and approve the remaining contracts associated with implementation.
Budget/Fiscal Impact:
A portion of TIF funding includes an MEDC RAP Grant, which is increasing from $800,000 to $2,452,820.31 (approximately a $1,653,000 increase). Table 1, below, reflects DDA project budget elements approved in March 2026. Table 2 shows increases associated with the increased grant amount (added public art and retractable bollards) as well as the planned Housing Commission partnership. Table 3 reflects the combined totals and the amended Fourth Ave Project Budget. The FY27 Budget in both the General/TIF Fund and the Parking CIP Fund is sufficient to absorb the project elements related to the additional grant dollars.
The following charts are attached (pdf)-DDA Construction Phase Project Budget Approved March 2026, Additional DDA Construction Phase Funding, and Combined DDA Construction Phase Project Budget Approved August 2026
Public Art Next Steps and Implementation:
With the approval of this resolution, staff can proceed with the Fourth Ave public art contracts and finalize the art design. Final design and fabrication for the parking structure screen art is estimated to take 10-12 months with installation in summer 2027. Final design and fabrication for the bronze sculptures is estimated to take 18-24 months with installation in summer 2028.
Prepared by: Amber Miller, Capital Projects and Planning Manager
Body
Whereas, The Ann Arbor Downtown Development Authority’s (“DDA”) 2026-2055 Development Plan and the City of Ann Arbor’s Capital Improvements Plan identified Fourth Avenue as a priority capital project;
Whereas, In March 2026, the DDA Board established a project budget for the Fourth Avenue Reconstruction Project, and in June 2026, the DDA Board accepted an additional $1.7 million in grant funding for the project;
Whereas It is now necessary to amend the project budget and authorize execution of associated contracts to utilize these grant dollars;
RESOLVED, That the Fourth Ave Reconstruction Project Budget be amended to $6,365,020 as follows:
The General/TIF Fund portion shall be increased from $4,353,018.63 to $5,473,437.79, an increase of $1,120,419.16
The Parking Fund portion shall remain at $891,582.13, as established previously;
RESOLVED, That the DDA’s portion of the construction phase contingency be increased to $574,357.23 and that the DDA Executive Director be authorized to approve construction change orders not to exceed that amount, in order to satisfactorily complete this project;
RESOLVED, That the DDA Executive Director be authorized and directed to execute all associated public art contracts and a cost allocation agreement with the Ann Arbor Housing and Development Corporation (AAHDC) after approval as to form by the DDA Attorney;
RESOLVED, That the Executive Director be authorized to take necessary administrative actions to implement this resolution.