Arbor Update

Ann Arbor Area Community News

First & Washington Redevelopment Proposals

16. June 2006 • Murph
Email this article

The proposals received for the corner of First and Washington Streets, formerly the site of a decrepit parking garage, were mentioned briefly ; the DDA was kind enough to provide me with copies to scan. PDFs linked:

  • Washington Commons is a homegrown proposal by Patrick O’Neill, of NSI Consulting & Development , with Ann Arbor lawyer Scott Munzel, designed by Carl Luckenbach . The proposal features street-level commercial space, 276 parking spaces, 24 units of market-rate housing, and 48 units of deed-restricted permanently affordable (“workforce”) housing, priced from $84,000 to $195,000.
  • Ann Arbor City Apartments , from the Village Green Companies in Farmington Hills, offers 205 parking spaces and 114 flexible-term apartments / residential hotel units, including 11 affordable units, and “resort-class amenities”, identifying the corporate/research consultant or contract employee as the target audience.
  • Dearborn Village Partners, LLC provides a rather mystifying entry for a “first-class Luxury Hotel propety with retail and residential diversity.” Mystifying because their submission appears to be a printout of PowerPoint rather than the 50-page documents the others provide.

The prices offered by the various proposals for the land were not included in the materials I received, though it’s worth noting that Washington Commons proposes to not actually buy the land, but to develop the land for a set fee, and have the retail and residential units transferred directly from the City to the end-user.

In addition to the previously linked Ann Arbor News story on the proposals, the June Ann Arbor Observer has a brief piece, dead tree only, as is the Observer way.

  1. Sorry, no picture – my copied-and-scanned version don’t have high enough quality images to be worth putting up.

    My vote would be for the Washington Commons – it’s the only proposal that appears to have been submitted in the spirit of the RFP, and seems to do a good job of it. (They even come in at two stories shorter than the maximum height the RFP offers.) Village Green’s proposal seems like they’re just looking for an opportunity to cash in on the largesse-cum-gullibility of the City and DDA. Dearborn Village’s submission is too spare to understand, let alone judge.

       —Murph.    Jun. 16 '06 - 05:18AM    #
  2. In a brief piece in the Ann Arbor News today (I can’t find a link for it), they implied that only Washington Commons and Ann Arbor City Apartments were being considered. They were the only two discussed in a meeting yesterday of the developers and the committee appointed by City Council to discuss this project.

       —Juliew    Jun. 16 '06 - 06:33AM    #
  3. The Observer also implied that, and, definitely, the third proposal seems pretty insubstantial. As of when I got the copies (admittedly, over a week ago), though, I was told that the selection committee hadn’t even been finalized, and therefore nothing had been ruled out yet.

    One thing I notice is that the floorplans of both “good” proposals seem to assume a rectangular shape. Problem is, last I was keeping score, Mark Hodash (Downtown Home & Garden) owns a little strip of land on this proposal’s side of the alley. If I remember right, the RFP specifically stated that proposals either must work around that little strip or else submit written evidence that Hodash is ready to sell it to them at price certain. AFAICT, both good proposals fail to do that.

       —Murph.    Jun. 16 '06 - 04:59PM    #
  4. With the economy as it is, is there really a justifiable demand for all this development?

       —Ross Johnson    Jun. 17 '06 - 08:00PM    #
  5. “With the economy as it is, is there really a justifiable demand for all this development?”

    Well the developers want to build. Doesn’t that sort of answer your question?

       —todd    Jun. 17 '06 - 08:43PM    #
  6. “Well the developers want to build. Doesn’t that sort of answer your question?”

    Not really. There are plenty of products out there that continue to be produced regardless of low demand.

       —Ross Johnson    Jun. 18 '06 - 07:37AM    #
  7. “Not really. There are plenty of products out there that continue to be produced regardless of low demand.”

    Hmmm. I see. So you want to make the decisions for these developers? You’re thinking that they didn’t do their homework on these properties?

    Or are you implying that there are negative consequences if these projects are finished, but not filled immediately?

       —todd    Jun. 18 '06 - 09:23AM    #
  8. Just a simple question, looking for peoples thoughts.

    No need to look for hidden undertones or resorting to rude remarks.

       —Ross Johnson    Jun. 19 '06 - 07:42AM    #
  9. I wasn’t being rude. I was being clear, and I gave you my thoughts.

    The very fact that the developers are building tells you that they believe that there is a demand, and they are willing to risk capital to fill that demand. It’s the best gauge that capitalism has.

       —todd    Jun. 19 '06 - 08:01AM    #
  10. Considering that there were only two legitimate responses to the RFP and one of those is set up so the developers specifically don’t take much risk and the other is for a particular kind of housing that is in short supply downtown but has a built-in market (short-term high-end rentals for University professionals), I’d say the market for mid to high-range condos is pretty saturated at the moment. I think developers are waiting to see how Liberty Lofts and LoFT322 do and how pre-sales for all the other projects go before making any more commitments. Looks like Liberty Lofts has only a few units left on the market, but LoFT322 still has all their units listed in the multiple listings (despite saying they were 100% presold).

       —Juliew    Jun. 19 '06 - 08:21PM    #
  11. Downtown Ann Arbor definitely needs a hotel to increase tourism, support local businesses including corporate and retail. Please spare us additional trendy housing developments with “affordable” components, which are only affordable for the middle class who don’t qualify, and are not affordable for the underpaid for whom they are meant. What a joke.

       —Anonymous    Jun. 26 '06 - 06:58PM    #
  12. And the winner is …

    Resolution to Approve the Selection of Village Green Companies as Purchaser and Redeveloper of the City Property at First and Washington Streets Per their Proposal in Response to RFP #621 and to Authorize the City Administrator and City Attorney to Act as Negotiators for the City (1st & Washington RFP Selection Committee – Tom Crawford, Chief Financial Officer)
    (Village Green Companies “City Apartments” Presentation – Jonathon Holtzman)

    Looks like boutique rentals win the day. This agenda item is appearing on Monday’s City Council meeting.

       —Juliew    Jul. 14 '06 - 07:04PM    #
  13. Ack—when did this happen? What happened to all the affordable housing and parking spaces that Washington Commons was going to provide?

    Sounds to me like the city made a grab for the cash…have to investigate.

       —Young Urban Amateur    Jul. 15 '06 - 01:13AM    #
  14. YUA, how about investigating before coming to a speculative conclusion/allegation?

       —Steve Bean    Jul. 15 '06 - 02:07AM    #
  15. Hey, all I said was “It sounds to me…” If anyone takes it more seriously than that, I’m not sure it’s my problem. I’m nobody special. Obviously this is my completely uninformed opinion. Isn’t that obvious? Seems obvious to me…and considering the numerous unfounded allegations that tend to fly back and forth on this board, I’d say this surely counts among the least of them…

    But alright, in the interest of supporting a higher level of discourse: just to clear things up I am not in fact claiming that the city made this decision based solely on the bottom line. In fact I have no idea why they made this decision, and I feel this way despite the fact that the city has publicly posted several reasons why they have made this choice. Thus I made my glib comment based purely on idiosyncratic reasons, and no one reading it should take it at all seriously. I in no way meant to impugn anyone’s motives, and I sincerely apologize for any confusion. For all I know it was the superior proposal. I am in fact investigating the reasons for the decision. Furthermore, in general, I do not support unsubstantiated claims, especially when they may suggest questionable motivations. So…I sincerely hope no one follows in my footsteps.

    (However, I might ask how come Murph didn’t get zinged for saying, in the very first post:

    “Village Green’s proposal seems like they’re just looking for an opportunity to cash in on the largesse-cum-gullibility of the City and DDA.”


       —Young Urban Amateur    Jul. 15 '06 - 03:25AM    #
  16. I’ll note that I’m a little underwhelmed by the response to the RFP – only 2.5 responses? (I understand that, three or four years back, the DDA put out an RFP for this same site, and received six responses; the selected developer eventually backed out, I think? I don’t know the whole story.)

    Now, despite the fact that I prefer Washington Commons, myself, I’m not terribly surprised that Village Green would be the pick. Notice that a big part of how WashCom was going to achieve a more affordable product was by shifting the risk from the developer to the City – the developer was basically going to serve as a super-general contractor, for a (fairly low) flat fee, rather than padding the budget to provide reasonable protection against the risk of not selling units. (I’m sympathetic, as my team’s real estate course project a few semesters back used this method, as it was about the only way we could find to manage a decent number of affordable units in downtown Ann Arbor.) I expect the city thinks they’re not in the business of taking on real estate development risk.

    (...That’s what we have those evil, evil developers around for, after all.)

       —Murph.    Jul. 15 '06 - 07:02AM    #
  17. “and considering the numerous unfounded allegations that tend to fly back and forth on this board”

    All the more reason to not further muddy the waters.

    Like everyone else here, YUA, you’re part of a community—the community I live in (though I’m no one special, either), and I’ll continue to challenge you (in the nicest possible way, of course) and everyone else to be more positive and less speculative when it comes to the people who write here as well as the people who work for our city and whose kids go to school with our kids. No need to take it personally. I need to be challenged to be more positive myself, sometimes. Please catch me if I stumble.

    As for Village Green and Washington Commons, my wife, who participated in the review committee, had a clear preference for VG, as did apparently everyone on the committee. Better attitude, more cooperative, ‘greener’, and the product seemed to largely make sense. Not perfect, but pretty good. I’ve been wondering if there have been expectations for this site to fulfill the goals of what was once a three-site plan. I think it would be unfair to judge the proposals on that basis. (But maybe now I’m speculating…)

    I wondered about Murph’s comment, too, when I read it. What was that about, Murph? I think I assumed at the time that you knew something I didn’t. (I hadn’t heard Jill’s impressions yet.)

       —Steve Bean    Jul. 15 '06 - 07:47AM    #
  18. Village Green does not, in my mind, fulfill the goals set out in the RFP. The Washington Commons proposal provides

    (a) More public parking – a big concern for downtown merchants, David Cahill, and people who don’t want to see extra parking structures built elsewhere.

    (b) Street-level commercial space, which would both help to activate the street somewhat and also, by merit of being off the beaten path a bit, probably have somewhat lower rents than the north-of-Ashley zone, allowing for something other than Yet Another Main Street Ventures Restaurant.*

    (c) A better range of housing, including housing that really and truly (sorry, Anonymous #11) would be “affordable” – $89k for-sale, income deed-restricted? That’s pretty impressive.

    Washington Commons, in short, did a better job of fulfilling what I thought was the spirit of the RFP than I expected anybody would – and I’m not surprised that they had to go through extreme fiscal contortions to do it. If we’re going to ask for “creative” developments for downtown A2, I don’t think we’ll find much better.

    Village Green, on the other hand, seems like just a development. I don’t have any real problems with it – it’s not bad – but I just don’t see much of a reason for this to be a project that the City goes the extra mile to make happen. My “cashing in” comment was meant to say that this project doesn’t need to be the benefactor of a high-profile City & DDA effort – they could go ahead and build it; this is just a chance to take it a little further.

    * It’s not really fair of me to target Main Street Ventures. Not only do they own most of their space, and therefore don’t participate directly in the escalating rent wars, but they invested when downtown was, I understand, a wasteland, and deserve a lot of credit for the present difference between A2’s Main Street and Ypsi’s Michigan Ave.

       —Murph.    Jul. 16 '06 - 07:19AM    #
  19. I just had Jill summarize the committee’s thinking again (maybe you can find Susan’s notes/minutes on the City’s website), and it seems that there are important details that aren’t conveyed by the original proposals.

    VG proposed “workforce” housing (granted, apartments, not owner-occupied, but the committee apparently thought plenty of new downtown condos are in the works) but didn’t describe it as such in their proposal. The difference, affordability-wise, is insignificant overall.

    The difference in public parking—a big concern for Jill and others downtown—turned out to be outweighed by the other advantages of the development. This is the area I think might have been too much to expect in a single site. They also proposed a couple spaces for ZipCar-type shared vehicles and covered bike parking.

    The committee apparently thought that the ground-floor commercial was less important since it is “off the beaten path”. (Your point about lower rents may be valid. Of course, foot traffic has to be sufficient to support a business, low rent or not.) WC proposed law offices—no big advantage there.

    In addition, VG would build a LEED-certified building, with green roofs, which was a big appeal. The lower height of 5 stories was also appealing as a transition from the west side. The appearance; the start time of this fall, compared to a year or more for WC’s; the upfront financing vs. the convoluted City backing for WC’s; all these factors were considered in VG’s favor, some greatly.

    Of course, there’s more. Maybe some of these details will come out at the council meeting tomorrow.

       —Steve Bean    Jul. 16 '06 - 07:42PM    #
  20. The parking for VG isn’t quite as bad as I first thought, though the fact that VG will be more apartments with fewer spaces is cause for some concern. Building heights were a non-issue for me, and I prefer taller in that area…it’s two blocks from any houses, and is situated towards the bottom of the floodplain. The affordability was also pretty attractive, I thought. The architecture in the proposal was more thought-out as well—VG’s design seemed a little hastily-made. I suppose the final product could be better.

    I will admit that willingness to work with the city and neighborhood, and a good track record with that, counts for a lot, so there is that in their favor. From the city’s standpoint, I can see how they might want to avoid more creative financing proposals for now…

    I am rather disappointed about the lack of first-floor commercial space, however. There are restaurants on either side of First from the corner, with potential for more commercial development at First & Liberty. To me this was a perfectly good trade-off for fewer apartments.

    I mean, Murph is right: it won’t be bad, and I admit it does have potential. I guess we’ll see.

       —YoungUrban Amateur    Jul. 16 '06 - 08:27PM    #
  21. I don’t have much to say about this other than as someone who lives on the OWS and who bikes in to work through downtown daily and who walks into downtown many times a week, I was hoping that this site would have some first floor commercial space.

    I don’t buy that it’s “off the beaten path”. I mean, the Y is right down the street, and Washington is one of the main east/west streets for pedestrian traffic at least. The space is dead now b/c, well, it’s a hole in the ground and across the street is a surface lot, but that area could be an extention of the Washington “commerical corridor”, such as it is, from Main to Ashley.

       —Young OWSider    Jul. 16 '06 - 09:54PM    #
  22. To clarify my comments about ground-floor commercial, I understand that the committee wanted it but couldn’t get it from VG without sacrificing even more parking (or, I suppose, needing an extra floor or two in height—a reasonable compromise, maybe?) It’s just that, compared to what WC offered, it wasn’t significant relative to everything else. Maybe something better could be negotiated. This was a selection committee process. I’m not clear on further opportunities to tweak it.

    Thanks, YUA, for pointing out the restaurants. I do think they’re off the beaten path at this point. Most customers that I see entering and leaving park in the surface lot across the street. Who knows whether they just come and go or if many visit retail elsewhere downtown during their stay. But all that could change with a development on that lot (the Brown block), which could include additional retail.

    The retail needs of the commuter foot traffic YOWS notes are probably sufficiently served by what’s on the next block towards Main. It’s the potential to either draw more people downtown, serve new residents (maybe there will be sufficient new demand there?), and/or meet the sort of pent-up demand that Robert Gibbs talked about that needs to be addressed, I think. The Brown block may play an important role in those areas as well.

    And again, there are more details about this component that the committee got into. It’s not easy to explain it all second hand. Maybe Leah will chime in and expand on her comments in the News article.

       —Steve Bean    Jul. 16 '06 - 10:30PM    #