Developers are finalizing plans for 14-story Zaragon Place 2 on E. William in Ann Arbor
The corner of East William and Thompson streets, where the former NBD Bank has been demolished. Site plans to build Zaragon Place 2 on the property will be submitted to Ann Arbor officials late this month.
Paula Gardner | AnnArbor.com
A developer with one recent project near the University of Michigan now plans to turn a former bank branch into a mixed-use student-housing high rise on the corner of East William and Thompson.
Zaragon Place 2 site plans will be submitted to the city by the end of the month, said developer Richard Perlman of Zaragon Co.
The building will resemble Zaragon Place, which opened on East University in fall 2009.
“We’re delighted with Zaragon Place 1,” said Perlman, “and that’s why we’re doing Zaragon Place 2.”
The building is planned as a 14-story tower with first-floor retail and 99 apartments with a mix of 1-, 2- and 4-bedroom units. It will total 200 to 350 beds, Perlman said.
A Zaragon-related entity, Democritus Associates LLC, has owned the 1/3-acre property at 500 E. William next to Cottage Inn Restaurant since September 2008, according to city records. Zaragon bought the former NBD Bank from an entity related to Campus Rentals Inc. of Ann Arbor.
Zaragon Place 2
A community information meeting on the project is scheduled for 4-6 p.m. April 12 at the Michigan Union.
- Location: 500 E. William at Thompson
- Proposed: 14 stories, 99-unit apartment building with ground floor retail space and onsite parking.
- Developer: Zaragon, based in Chicago.
- Other Ann Arbor projects: Zaragon Place, 619 E. University, south of South University.
Zaragon Place 1, which replaced the former Anberay Apartments on East University, has rental rates over $1,000 per bed, according to the Michigan Daily.
That 10-story building’s occupancy is “very high,” Perlman said, declining to name a number. It also is home to a restaurant and grocery on the first floor - Revive and Replenish - and underground parking.
Zaragon came onto the market at the same time as two other student high-rises: 4 Eleven Lofts on East Washington and The Courtyards near Plymouth Road and North Campus. All three, plus the stalled 601 Forest project near South University, represent new opportunities for amenity-driven student housing in Ann Arbor through high-rise construction.
Multiple smaller projects near campus and the under-construction North Quad at the University of Michigan also reflect a wave of infill projects designed to appeal to students seeking a newer rental.
Ann Arbor developer Peter Allen said Zaragon Place 1 "hit on all cylinders. It was executed beautifully."
Now, Allen said, as other developers consider moving forward on student housing projects in town, the announcement that Zaragon Place 2 will get started sends a message to the competition.
The existing new projects in the market represent the changing expectations among students, local commercial real estate experts say, as new construction with proximity to campus - and the market’s highest rental rates - compete with older properties and converted houses.
In that environment, launching a project two blocks from the Diag makes sense, Perlman said.
“The location is fantastic,” Perlman said, noting the property abuts a U-M parking lot to the south.
Perlman also expects Zaragon Place 2 to mirror the amenities found at Zaragon Place, including the onsite parking - 40 spaces are planned - along with a fitness center and loft-style design. The first-floor retail spaces will have frontage on both William and Thompson.
Perlman said financing markets for commercial construction have dramatically changed since he started what he calls “ZP1,” which was under way as the national lending crisis took hold in late 2008.
“There are far fewer lenders out there today,” Perlman said. “… There’s a whole different formula today. More cash is required and lender require a higher loan-to-value ratio.”
Still, he said, he’s negotiating with several lenders - primarily national banks - to finance the project. He would not estimate a finished cost.
“The University of Michigan is a very strong market,” Perlman said. “We know it very well.”
Zaragon is based in Chicago, but Perlman grew up in Metro Detroit, and both he and his son graduated from the University of Michigan. He said he's also willing to consider more projects in town, including branching out from student housing.
Zaragon also recently bought a 660-bed student apartment complex called The Arboretum in Kalamazoo from a lender. Other properties in its seven-state portfolio include a total of 3,500 apartments, office buildings, and a mobile home park.
As for timing on Zaragon Place 2, Perlman said, “we’re going to get started as soon as we can.”
Site plans should be submitted to the city by April 26, and they’d likely reach the Planning Commission in June and City Council by August.
Construction could begin late this year, and Perlman estimated it would last up to 24 months.
The site plan will be submitted under existing zoning regulations, Perlman added.
Zaragon will be holding a meeting from 4-6 p.m. Monday, April 12, in the Anderson Room of the Michigan Union to meet with neighbors of the project.
The project complies with the D1/D2 zoning regulations recently adopted by the city for downtown development after the “A2D2” process.
View rendering in the community meeting announcement here.
Comments
Brian
Thu, Feb 9, 2012 : 12:59 a.m.
I guess it is inevitable that factory student housing pushes the small businesses out. The same way that factory farming pushes out the independant farms...
say it plain
Thu, Apr 8, 2010 : 10:14 p.m.
I am all for providing students with housing near campus, and doing so as efficiently as possible. The $1000 bedrooms are a function of college 'funny money', so far as I can tell, tied to what people are willing to accept about the expense of *college* more than their acceptance of rental rates, and I have no idea how to change that aspect of the Ann Arbor Housing Market, short of straight-out forcing the UM to build numerous and decent enough dorm rooms to house all their students, and at less outrageous prices too. Still, providing the students with close-to-campus housing and containing the 'student sprawl' has got to be good for everyone ultimately, no? It would be nice if a monopoly of sorts didn't arise, if some competition on price could be part of the picture, because it sounds like Zaragon 1 isn't about giving value to tenants lol so much as it about their having landed on the pretty parcel before their competitors, but hey I guess that's the game, some play it better.
townie
Thu, Apr 8, 2010 : 4:32 p.m.
I agree with PersonX, that theoretically this is in the right place and I hope that there is every reason to support it, because I certainly want to do so. I don't know all the details, but plan to attend the first public meeting to learn more. With the Moravian, naive and inexperienced developers tried to foist their monster into a neighborhood and floodway because they couldn't afford downtown land. Then, they begged the City for a special variance that would have allowed them to exceed certain limits that even D1, our newest and most dense zoning district, does not allow. Heritage Row is set to try the same thing with a slightly more attractive wrapper, but both projects were/are misplaced and misguided. Perhaps all the YPs are still sleeping off the free mojitos provided by their Moravian pals, but they should be rejoicing at this news of new YP housing! Downtown density that is actually DOWNTOWN! Tall buildings! New units! Have at it YPs, but if you want a parking space, or a window in your bedroom, you may want to get involved in the process now, instead of waiting for another open bar. Don't expect those of us who actually pay attention, read the details and attend meetings to send out a Twitter or a text if this project isn't everything you expected. Heck, what am I saying, you'll be long gone before they finish building it anyway, right?
Lokalisierung
Tue, Apr 6, 2010 : 11:26 a.m.
"Another more likely scenario would be that smaller mom and pop rentals will be forced to rent to less desirable residents simply to keep the tax man off their backs, starting a downward spiral in the quality of the tenancy." Sorry, I don't equate lowering the rent to opening the floodgates to less disarable people. And just so we're on the same page here...what exactly is a "less disarable" than college students? People that work hard all week and don't get up and start drinkg/playing beer pong all weekend?
Moose
Tue, Apr 6, 2010 : 8:51 a.m.
"More buildings is always a good thing." The writer can't be serious. If they are, then let's get rid of the parks, the open space, the farms and build something on every available inch of land. Such a statement is incredibly short sighted.
PersonX
Tue, Apr 6, 2010 : 8:37 a.m.
The Zaragon, unlike the Moravian, is in the right place and has the right zoning. If rental houses are no longer profitable, they might indeed return to single family dwelling, which would be very nice, although such conversions can be very expensive. They will not be bulldozed for more high rises--that is what we have zoning for.
Just Say No To Censorship
Tue, Apr 6, 2010 : 7:56 a.m.
More buildings is always a good thing. Right now, living in a decent (not fancy) apartment is a luxury because so few are being built they can charge so much for them. More competition=price comes down and SFH slumlords have to offer something better to stay in business.
Griffen
Tue, Apr 6, 2010 : 7:37 a.m.
This is a great development and I hope that the tower meets the approval of council. The area is perfect, the zoning good, and it is close enough to campus to offer students a real alternative to the traditional student slums. Bravo!
LauraM
Mon, Apr 5, 2010 : 10:36 p.m.
99 apartments, 250-300 beds and only 40 parking spaces?
The Picker
Mon, Apr 5, 2010 : 7:24 p.m.
Another more likely scenario would be that smaller mom and pop rentals will be forced to rent to less desirable residents simply to keep the tax man off their backs, starting a downward spiral in the quality of the tenancy. The return of many of these homes to single family residency is fantasy. More likely they will be bulldozed for more high rise buildings, which will require them to charge the modern price tag of $1000 per bed for essentually a vanilla box. So long quaint college town, hello high density living. Personally a $900 1 bedroom apt with a private kitchen and living room is much more appealing than a $1000 room with a toilet, but hey thats me. Some people may love cleaning up after their sloppy room mates.
Brian Bundesen
Mon, Apr 5, 2010 : 6:36 p.m.
With all the new beds, perhaps the U of M would simply admit more students, alleviating the concern about what happens to the current housing supply.
Paula Gardner
Mon, Apr 5, 2010 : 6:15 p.m.
The question about the existing student housing stock is interesting. We've done stories on it at Business Review over the past couple of years, ever since the first Zaragon was proposed. As more projects gain traction as the market recovers, we'll probably see some of the "student ghetto" returned to single family homes. That could be a long transition, and it could be painful for owners who bought at the peak of the market. But many agree that as these projects take shape close to campus, it's very likely that the "rim" that defines student housing boundaries will shrink. Which means more supply to fill the demand for Ann Arbor housing - maybe less sprawl, maybe lower values in other neighborhoods, at least for a while. But maybe the pace will be gradual enough that most of us won't feel it!
Lokalisierung
Mon, Apr 5, 2010 : 5:44 p.m.
"Will the vacancy rate in these properties climb to a point where they will be abandoned." The old houses they move out of will not have people signing a lease, and the landlord will have to deal with that. Hopefully they would drop their asking price, thus more afordable housing for all.
The Picker
Mon, Apr 5, 2010 : 5:37 p.m.
What will become of all the housing that the students currently occupy? Will the vacancy rate in these properties climb to a point where they will be abandoned. The character of A2 may be about to change. Will it be for the better?
hotsauce_gm
Mon, Apr 5, 2010 : 4:53 p.m.
correction... @TF
hotsauce_gm
Mon, Apr 5, 2010 : 4:51 p.m.
@Bonsai Go to the site location and do a 360. I think you'll notice that the neighborhood can clearly handle a building over 12 stories... LOL
John of Saline
Mon, Apr 5, 2010 : 4:28 p.m.
Wouldn't it be kind of a narrow building?
treetowncartel
Mon, Apr 5, 2010 : 3:36 p.m.
A student living there will never have the pleasure of drinking beer on the roof of the porch, or passing out on the couch down below.
Moose
Mon, Apr 5, 2010 : 3:35 p.m.
This is the right location for this kind of development.
brad
Mon, Apr 5, 2010 : 3:09 p.m.
Where are the design guidelines? That was an essential part to the new downtown zoning. Too bad it's in the DDA; the General Fund doesn't get anything in new property taxes.
ann_arbor_guy
Mon, Apr 5, 2010 : 2:58 p.m.
This is great news, I am happy to see more density downtown and less sprawl outside of the city. The green belt does make sense, but the execution of it requires more high rises like this along with the purchasing of surrounding property to limit sprawl.
mrk
Mon, Apr 5, 2010 : 2:55 p.m.
I'm all for increased density downtown. Not to mention that hole is ugly. But who are these students that have $1000 per month to spend on rent? Or I guess I should ask who their parents are and how I can get their jobs... I think I may be a little envious.
SemperFi
Mon, Apr 5, 2010 : 2:40 p.m.
A 14 story mixed use building is in keeping with the make-up of the block. I think that the wind tunnel effect near the Tower Plaza has much to do with the parking structure over Maynard St. that funnels the wind. It probably won't be an issue on Thompson. Over-priced is up to the renter to decide. Clearly, many students have the means and are tired of living in dilapidated rental properties.
Adam Jaskiewicz
Mon, Apr 5, 2010 : 2:37 p.m.
Getting more people living downtown will decrease car traffic and sprawl, and to do so we need to build up, not out. I hope we see more high-density development in the core areas of downtown like this, rather than low- and medium-density on the edges of downtown. Our zoning should encourage buildings like this. Increasing density and mixing land uses puts residents close to jobs and destinations, which means a more pedestrian-friendly downtown.
Paula Gardner
Mon, Apr 5, 2010 : 2:37 p.m.
For comparison... Tower Plaza, at the northwest corner of William and Maynard, is 26 stories. Maynard House, at the southwest corner of William and Maynard, is 10, according to the city's website.
TF
Mon, Apr 5, 2010 : 2:29 p.m.
14 floors? I don't think that neighborhood can handle anything higher than 12.
Bonsai
Mon, Apr 5, 2010 : 1:58 p.m.
This will ruin Ann Arbor's character -- we need our abandoned banks and vacant lots.
nowayjose
Mon, Apr 5, 2010 : 1:47 p.m.
Wind tunnel. That's ridiculous. I've never had a hard time walking down E. William. Some people will find any excuse to shoot down new development. I say build it, looks a lot better than the gapping hole that's there now. Anyone who doesn't like it should pay the multiple of millions of dollars and build something they find more suitable.
Lokalisierung
Mon, Apr 5, 2010 : 1:39 p.m.
Build it up...I like this idea.
phdeez
Mon, Apr 5, 2010 : 1:34 p.m.
I am all for development of the downtown. But I have two issues. First, do we really need more over-priced rental units? Second, that block on William (between Thompson and Maynard) is already a wind tunnel. This new building will make it nearly un-walkable.