The Ann Arbor District Library has a measure on the November 2012 ballot to vote in a millage to build a new downtown library building. I think it would be a great project and I'm wholeheartedly supporting it.
The main pro-library campaign site is OurNewLibrary.com which lays out the costs of the new structure ($65 million to be paid for over 30 years) and the cost to the taxpayer (0.56 mills).
One of the big issues with the current library is just how underequipped it is to host functions and events. I squeezed Library Camp into the building in 2006, and it was a stretch even to get 40 or so people into the usable parts of the building for small group meetings. Downtown meeting space is scarce already - see the Arborwiki "Places to have a meeting" page to see just how hard it is to find a spot to gather a group together in a public space.
Library architecture has changed a lot since the 1950s, when the first part of the downtown AADL building was built. There have been two additions to the original building since then, but nothing to replace the aging mechanical systems.
Look for more here as the vote date gets closer. The campaign has yard signs -- people can email email@example.com to request one.
UPDATED with yard sign information and a graphic from the yard sign art.