Eminent domain proceedings approved by University of Michigan regents likely to succeed
Sam Copi, manager of Copi Properties said the houses at 541 and 543 S. Division St., pictured here, have tenants through 2014.
Daniel Brenner | AnnArbor.com
Construction for the new residence hall was approved at Thursday’s regents meeting.
According to university spokesman Rick Fitzgerald, U-M offered to buy the two properties owned by David Copi at 541 and 543 S. Division St., in December, around the same time the property leased by Blimpy Burger was purchased by the university.
“It was determined at that point that the parties were so far apart that an agreement simply could not be reached right then,” he said.
The Board of Regents voted Thursday to direct officers and staff of the university to acquire the two parcels for “just compensation,” noting they should exercise the right of eminent domain if necessary.
The two properties that could be purchased by the university are both under the management of Copi Properties. According to Sam Copi, David Copi’s son and manager of Copi Properties, 541 S. Division St. is a six-bedroom house under lease through May 2014. The property at 543 S. Division St. contains a six-bedroom and a three-bedroom unit, both under lease through September 2014.
If Copi decides not to sell the properties after an official offer is made, U-M can file condemnation actions on the properties, likely in Washtenaw County Circuit Court.
“The owners of the property will then receive an official summons and complaint for condemnation for the property,” eminent domain attorney H. Adam Cohen said.
Fitzgerald said as of Friday, the university had not filed a condemnation action. If an action is filed, Copi could attempt to prove there is either a lack of public use or public necessity for the proposed project.
“If either one of those is disproved, that would be sufficient to defeat taking the property,” Cohen, an attorney with the Birmingham-based Steinhardt, Pesick and Cohen, said.
In order to determine public use, a court would look at whether use of the property would be for the benefit or use of the public. In the case of the university, Cohen said the “public” also can be defined as the students.
Cohen said it is important that the university be the one building and operating the future dormitory. The Michigan Supreme Court ruled in 2004 that it is unconstitutional for a public entity to claim property through eminent domain and then sell it to a private company or entity.
The second half of the equation, public necessity, refers to how necessary these particular parcels are to the project.
“Necessity is more along the lines of ‘does the government or entity really need this property as opposed to another property down the street?’ or ‘do they really need all of my property as opposed to just part of it?’” Cohen said.
He added that the fact that the building replacing the houses will be a residence hall puts the university on solid footing.
“A residence hall is a classic university use,” he said. “This university is a public university, which enjoys the power of eminent domain. And, I would suggest, even though I am an advocate for owners rights, that a dormitory or residence hall is a typical university function and typical public use.”
If Copi declines to contest whether the property is eligible for eminent domain, the court’s attention would turn to what “just compensation” is for the property. The University paid South Division Street Properties, LLC, a company registered to former athletic director William Martin, $3.17 million for four properties in the area.
According to Ann Arbor city tax records, the four property’s assessed value was $845,200, giving them an approximate market value of $1.69 million. The two properties owned by Copi have a combined assessed value of $366,200 giving them an approximate market value of $732,400.
Sam Copi said he and his father declined to comment on the situation. Mike Martin, William Martin’s son, also declined comment and said his father is unreachable for the time being.
Fitzgerald said the university does not have a timeline for the acquisition of the property, but the vote by the regents was necessary before any eminent domain proceedings could occur.
“Those are the remaining pieces of the puzzle for an important location for redevelopment for central campus,” he said.
Ben Freed covers business for AnnArbor.com. You can sign up here to receive Business Review updates every week. Reach out to Ben at 734-623-2528 or email him at benfreed@annarbor.com. Follow him on twitter @BFreedinA2
Comments
Ms1215919
Wed, May 8, 2013 : 10:59 p.m.
It's about time that limits be imposed on the UofM as far as the amount of tax-free property it can hold. I suggest that they should be allowed to hold a certain amount of tax-free property after which they pay their fair share of taxes. And, in my humble opinion, they already own that certain amount. Other universities in the country have had limits imposed on their tax-free property holdings. Oh, I forgot..this is Ann Arbor. They "do it up different" alright. As for Mr. Martin's profits and when he bought the four properties his LLC was compensated for by the U....puleeze.
Stuart Brown
Tue, Apr 23, 2013 : 4:12 a.m.
A simple google search of "construction cost for dormitory" resulted in a site at: http://www.reedconstructiondata.com/rsmeans/models/college-dormitory/ which said the average construction cost for a dorm is about $200 sq/ft. UofM is spending $500 sq/ft on the proposed dorm. I find it offensive that a public university should be spending 2.5 times the average in construction costs for a building. The fact that it is donated money that pays for most of the cost is not relevant; these donated dollars could go a lot further and help more students achieve their goals if the money was not squandered on inflated construction costs. In other words, housing for 2.5 times more students could be had if costs were in line with national averages. These costs lead me to wonder if Mr. Martins plundering of a public university is simply the tip of the iceberg. What other quid pro quos or outright kickbacks exist when 2.5 times the money is spent to build a simple dorm? Another point, I looked at the cost of UofM dorm room & board and compared it to the ICC over the last 30 years; long story short, the ICC's cost were in line with inflation while UofM's costs were about 50% a year over inflation. UofM pays no property taxes, gets construction money from donations made by wealthy people and still cannot manage to keep their charges to students in line with inflation.
a2nancy
Mon, Apr 22, 2013 : 5:12 p.m.
This looks like a David & Goliath situation here. I urge everyone to keep up the pressure and encourage Mr. Copi to go to court. Eminent Domain is a nasty way to go. The historic Blimpy's corner is an Ann Arbor Icon and shouldn't be messed with. Someone should ask Mr. Munger if he really wants to be associated with a boondogle like this!
JimG
Mon, Apr 22, 2013 : 1:59 p.m.
So, the "Bullies of the West" are trying to take more private property by eminent domain for their pseudo-public money making enterprise. And poor Ann Arbor is left with less taxable property. So this is how a public institution behaves when they think they are more important that the local citizens and people's property rights. Have they become so arrogant that they believe they can just take what they want? Where is the outcry from the liberals and the press? Why doesn't AA.com publish the board members votes, the discussion, and more about the Coleman tyranny? Or was this a closed meeting by a public" entity? This whole affair has a distinct but familiar stench.
blue85
Mon, Apr 22, 2013 : 4:18 p.m.
"Where is the outcry from the liberals and the press? " Munger is a staunch conservative and OK with the process of eminent domain being used. Eminent domain is a conservative value in action...did you lose your copy of the playbook? "Why doesn't AA.com publish the board members votes, the discussion, and more about the Coleman tyranny? Or was this a closed meeting by a public" entity? This whole affair has a distinct but familiar stench." Try googling the regental meetings and reading the minutes. If you can find a kid under 10, they can explain to you how to use google and if they have a 12 year old sibling, that sibling can sound the words out for you.
Brad
Mon, Apr 22, 2013 : 12:02 p.m.
You need to lay off "Sailboat Willie" (Martin) and let the 1%-ers get their skim of the action. Then just wait for the trickle-down to start flowing ...
Mercutio
Mon, Apr 22, 2013 : 1:59 a.m.
UM has tons of unused land on North Campus by Bursley Dorm, why can't they build there? Doesn't that mean that they don't actually need this particular parcel, when they have alternate land already?
Mackinac Straits
Mon, Apr 22, 2013 : 1:53 a.m.
The UofM should simply buy one of the new luxury student apartments. Much cheaper, and already built -- without the messy business of confiscating private property.
blue85
Mon, Apr 22, 2013 : 4:16 p.m.
Yes, and how much would Charlie Munger, the donor, pay for a used building to put his name on? The $110MM comes from California and is entirely "new money" to the state of Michigan. If you think it is easy to draw in new money, give it a shot and show us your fundraising expertise. Show us how to get a donor with new money to buy used goods. Good luck with that.
Useless
Mon, Apr 22, 2013 : 12:55 a.m.
Anybody else find it amusing that Bill Martin "is unreachable for the time being"? Seems to be the company line when he was at Michigan and in his private business.
Arborcomment
Mon, Apr 22, 2013 : 12:46 a.m.
So the Regents want this bad enough for the black eye of eminent domain. Why? Is there a shortage of housing not met by the local market? Don't think so. Follow the money. Even at a "cheap" price of $1000 a month x 600 residents x 12 months (grad students typically carry a year lease), that's $7.2 million a year. Since the Munger gift knocks off $110 million of the price, this place starts earning big bucks in as little as 11 years. Corporate greed "M" style - backed by elected officials no less - you'd think the good liberal A2 citizens would be in the streets on this.
Arborcomment
Mon, Apr 22, 2013 : 10:36 p.m.
And as 1 bedrooms go for $970 in far off Northwood housing, I am NOT including a meal plan. Most graduate housing offerings at other schools don't include such.
Arborcomment
Mon, Apr 22, 2013 : 10:23 p.m.
Thanks Blue, I appreciate the technical details and the humming virtuous circle analogy. I can sum it up this way: big money is tempting the Regents to deprive the current owner the right to keep or sell his property.
blue85
Mon, Apr 22, 2013 : 4:14 p.m.
You are forgetting: 1) 2.5% depreciation a year or $4.6 million/year; 2) electricity, water and other utilities; 3) the fact that the figure you cite probably contains a meal plan. Yes, this is a big gift, and yes the U "makes money", but only in the sense that any not for profit makes money...all of that money gets recycled back into educating students and doing so more cheaply and by doing so reducing the degree to which the citizens of Michigan subsidize the U. As Jeff notes, the university, subject only to operating margin gain/loss, operates at zero profit. Any "edge" is gained from the gift and will be plowed back into fellowships and research. Research and creating knowledge is what brings money to the U and creates more research and knowledge. It is a virtuous circle and one of the few economic jewels in the state of Michigan.
Jeff Punch
Mon, Apr 22, 2013 : 12:25 p.m.
So what if it does turn a "profit"? They can't distribute earnings, the University is owned by the people. They would simply invest in the University infrastructure and/or operating costs. Wouldn't that be a good thing? I'm probably more of a capitalist than most, but it seems to me that the complaints over the years about wanting high density in downtown go contrary to the theme of not allowing a more efficient living space replace one that is less efficient. Let's just hope they get the water pipes right this time.
rm1
Sun, Apr 21, 2013 : 11:57 p.m.
I believe the headline is correct: the U will likely succeed on its application for eminent domain. The important open question is what Mr. Copi will be paid by the U for the two properties. The Michigan Constitution provides that " Private property shall not be taken for public use without just compensation . . . Compensation shall be determined in proceedings in a court of record." If the parties do not agree on a price -- which they could do at any time from tomorrow through the day the court declares the compensation figure -- the court will set the "just compensation". So the complaints here about the U "stealing" the property or taking it by "force" are not well taken. It's all pretty routine, with the fairness of the price assured by the neutral arbiter, he court. Mr. Copi is apparently holding out for a higher price, as he is free to do. I'd expect that the U and Mr. Copi will settle, with the U paying a bit more than the estimated likely judgment, in return for quicker possession. Re eminent domain, see: http://www.bosglazier.com/domain.shtml There's a lot more information if you search for "eminent domain michigan".
jcj
Tue, Apr 23, 2013 : 2:18 p.m.
So the someones rights are determined by how long they have owned THEIR property or how they use THEIR property. Interesting concept!
rm1
Mon, Apr 22, 2013 : 4:07 a.m.
"What is routine about taking a property IF the owner does NOT want to sell? " This might be different, and the complaints on this comment board somewhat justified, if the U were taking family homes of long standing, or buildings of some distinction. But this is entirely fungible commercial property, student housing with presumably the usual student turnover, of no distinction and in an indifferent state of repair (look at the picture!). So all of this is a routine commercial transaction. The U is entitled to seek eminent domain, will surely get it since University activities are clearly for a public purpose, and the court will set the "just compensation" required by law. It seems likely the U and Mr. Copi are merely engaged in a dance of negotiation over the settlement price. And Mr. Copi will likely be delighted with the settlement price, because it will reflect a premium over fair value, as the U pays a premium in return for earlier possession than it would have if the court proceeding went to its leisurely conclusion. And Mr. Copi can use the settlement proceeds for other investments in commercial property.
jcj
Mon, Apr 22, 2013 : 12:05 a.m.
rm1 It's all pretty routine, with the fairness of the price assured by the neutral arbiter, he court. What is routine about taking a property IF the owner does NOT want to sell?
Nicholas Urfe
Sun, Apr 21, 2013 : 11:49 p.m.
Grad students are older and typically wayy past the living in a dorm phase. This smells of the University getting into the luxury housing market, to compete with the new student high rises.
Justin Altman
Sun, Apr 21, 2013 : 10:57 p.m.
The only "just price" is a mutually agreeable price. If UM is unwilling to pay what the owners are asking, and the owners are unwilling to take what UM is offering, then having this city use force to make the sale necessarily lessens the public welfare (in economic terms).
Laurie Barrett
Sun, Apr 21, 2013 : 10:13 p.m.
I used to live in a great house in Ann Arbor when I was a student. (Near Blimpy Burger) There's a U parking structure there now. I don't know if the U took away the house by force, but the street was a lot nicer when the house was there. I'm glad I got to live in it and be a UM student while it was still standing.
1959Viking
Sun, Apr 21, 2013 : 9:58 p.m.
What is the assessed value of the property? What was the universities offer? What was Copi's counter offer that was "so far apart?
Tom
Sun, Apr 21, 2013 : 8:50 p.m.
I am truly ashamed of my University.
Ralph
Sun, Apr 21, 2013 : 8:28 p.m.
Does the U of M really need another dorm? What about all the high rises going up in town?
Jack1213
Sun, Apr 21, 2013 : 8:06 p.m.
So I appreciate the University and its presence here in Ann Arbor but it is time the city and the University look at the long-term ramifications of the University being able to buy up property and forcing out residents. The University is not only taking money off the tax rolls but they are being allowed to destroy neighborhoods and historic homes that make Ann Arbor, Ann Arbor. These things are important and have long been cherished and appreciated by its residents. U of M is always talking about being eco friendly, what if they considered that when building --more than just to lower electric bills. What if they increased the use or density of some of their builds by increasing heights? Also we allow them to destroy Ann Arbor and with their pledge to constantly build what happens when they determine they no longer wish to use that building? Look at the Wall st neighborhood. They destroyed it and now they are going to completely move the hospital/health system from its current location to Green and Plymouth. What will they leave in its wake? They took out a lot of housing and now will leave an empty shell in the middle of ann arbor. A shell that could be used as for a new dorm. It would be centrally located. By buying up all these central properties they are pushing the residents further out, which makes it more necessary to require transportation into campus. How do they accomadate more vehicles? How does it impact the economy with less foot traffic in the neighborhood shops? Allowing them to take whatever properties they want is destroying the Ann Arbor we love and it compounds problems we already have. Let's make the best use of the things we already have. REcycle. I know we live in a Me, Me, me society but not every department needs their own building and U of M should not get everything it wants just because. We make this town just as much as U of M does.
Jeff Punch
Mon, Apr 22, 2013 : 7:17 a.m.
I think everyone realizes the Unversity has obligations to compensate the city for the services they get free because they don't pay property taxes. I know they make some effort to cover this but whether it is fair or not I have no idea. But I think it is silly things to say that it is "forcing residents" out when you are talking about two houses being rented by the room. Were it a family that simply liked to live there, or even a group of elderly people in community, it would be rude. But it isn't. It is pretty likely that the people renting the rooms are most if not all students. The University is about public good- it educates our children. That's more important that some investor hoping to get 10 to 1 on his money. Last I checked the new University hospital is scheduled to be built in at least 10 years, and why would one assume that the space will be left empty? The foot traffic argument was proven wrong. Car free living is not viable in down town Ann Arbor because the population density is too low to support a real grocery store. You know how much gas will be saved not busing a thousand kids back and forth from Wall Street many times a day for decades? Division is close enough to walk. I realize the eminent domain move looks ugly, but this is the standard legal recourse when a property owner thinks he can get way way way more than the property is valued at because he is so shewd and has a key piece of real estate. Instead he has to settle with way more than the property is valued at. I still don't see any valid arguments that this is a crappy thing for the U to do and I've been looking for them, with the exception of the property tax issue which potentially a big deal.
tim
Sun, Apr 21, 2013 : 7:30 p.m.
Perhaps the U should build student housing in the middle of the Diag --- then they wouldn't have to steal property from the public.
a2citizen
Mon, Apr 22, 2013 : 12:20 a.m.
Then where would they have the hash bash? Please thinks these things through.
Brad
Sun, Apr 21, 2013 : 8:28 p.m.
It's as good as stealing all the future property tax payments.
tim
Sun, Apr 21, 2013 : 8:21 p.m.
No -- steal as in taking property that the owner doesn't really want to sell.
Sparty
Sun, Apr 21, 2013 : 8:01 p.m.
Steal, as in paying twice what the property is worth ?
Jay Thomas
Sun, Apr 21, 2013 : 6:42 p.m.
I forgot to ask, didn't the amazingly wonderful and talented President Coleman *PICK* Bill Martin for a UofM job? Another Coleman legacy... an extra 1.6 million of cost to the U. But hey, it's only other people's money.
AfterDark
Sun, Apr 21, 2013 : 8:12 p.m.
I have to say, as a University alumnus, I won't be sorry to see Coleman go.
Jay Thomas
Sun, Apr 21, 2013 : 6:05 p.m.
Replacing perfectly good tax paying privately owned housing with government owned non taxpaying housing... by force. It's not like someone would be harmed if this particular graduate student housing wasn't built. It's not a hospital or something. So making the case that this is really in the public interest is weak at best.
martini man
Sun, Apr 21, 2013 : 5:44 p.m.
Liberal academia in action ..don' ya just love it ? So much more to say ..but so little that would be printable.
Tesla
Sun, Apr 21, 2013 : 5:36 p.m.
I honestly can not believe this. What I'd like to say would be deleted in seconds.
martini man
Mon, Apr 22, 2013 : 12:57 a.m.
ditto
Kelly Cunningham
Sun, Apr 21, 2013 : 4:24 p.m.
Bill Martin/So. Division St. Properties, LLC insisted on receiving no financial gain from the purchase and subsequent sale to UM. UM reimbursed the LLC for transactions costs. An outside accounting firm prepared a detailed financial review of the entire transaction for the university treasurer to review and confirm the LLC was made whole, with no financial gain. (Kelly C., Univ. of Michigan Public Affairs office.)
blue85
Mon, Apr 22, 2013 : 4:04 p.m.
"Bill Martin/So. Division St. Properties, LLC insisted on receiving no financial gain from the purchase and subsequent sale to UM. UM reimbursed the LLC for transactions costs. An outside accounting firm prepared a detailed financial review of the entire transaction for the university treasurer to review and confirm the LLC was made whole, with no financial gain." "How please explain was there no gain when the LLC was paid $3.17 million for the four properties? A legal way of using double talk to HIDE the profit." What about that confuses you? How is "no financial gain" double talk? If I pay $100 for a building and sell it to another party for $100, then I have no gain; this is completely standard accounting language. If I pay $100 and capitalize or add $1 in transaction costs, and sell for $101, I still experience no gain. How is that confusing? If an accounting firm reviews and certifies a transaction, where is your proof that they would sell their reputation and risk jail time in order to do the U a favor? As Kelly presents this, Martin acted as a de facto agent of the university and did so as a convenience/favor to the university. If you are going to slander Martin, use the courage of your convictions and confront directly in public or in court. In the past, Mr. Martin worked for one dollar per year for the university...this situation has a similar feel, the work was facilitative and donative.
jcj
Sun, Apr 21, 2013 : 9:16 p.m.
How please explain was there no gain when the LLC was paid $3.17 million for the four properties? A legal way of using double talk to HIDE the profit.
lynel
Sun, Apr 21, 2013 : 4:33 p.m.
Stop trying to confuse me with facts.
Larry Baird
Sun, Apr 21, 2013 : 4:02 p.m.
A number of the regents have expressed concerns about rising tuition costs. So my question for the regents: How will this new dorm, built with a $110 million gift, help meet your goals on college affordability? Perhaps, during the court proceedings, your "public goood" argument will touch on this topic.
Solitude
Mon, Apr 22, 2013 : 1:23 a.m.
Since the dorm, if it's built, will be built with free money, does that mean graduate students will get to live there for free? Seems to me it should be pretty easy to build something pretty nice for 50 mil or so, leaving 50 mil to pay for building operating expenses and maintenance for quite some time.
DJBudSonic
Sun, Apr 21, 2013 : 9:04 p.m.
glad that typo didn't go the other way... "pubic good"
Larry Baird
Sun, Apr 21, 2013 : 4:04 p.m.
typo- "public good"
Duane Collicott
Sun, Apr 21, 2013 : 3:34 p.m.
This would involve taking property from one entity who is renting it for living space to give it to another entity who will rent it for living space. That makes absolutely no sense at all. If this precedent is set, what sort of property would the U of M *not* be able to take from a citizen? If this succeeds, the next time it could easily be A citizen's own dwelling, not just somebody's rental property. Keep in mind, the U of M owns property all around this town, not just on campus. Next time maybe they want your home, even if you don't live near campus. This would create a future for Ann Arbor where eminent domain is based solely on wants, not needs, which is extremely dangerous and totally contrary to the concept of eminent domain.
Kai Petainen
Sun, Apr 21, 2013 : 2:34 p.m.
Thanks for covering this. Fascinating story. What was Martin's property assessed at? That is, was he paid a fair price? Seems like Copi should be paid a similar price as well for that property. If Martin received more $$ than what it was worth... then Copi should get the same premium. Otherwise, obvious conflict of interest. Would eminent domain occur if the university was private? What does Berkshire Hathaway think about this? It's a public company and it could reflect good/bad on them. Going 30 years ahead, should the houses on the other streets be afraid?
a2citizen
Sun, Apr 21, 2013 : 3:04 p.m.
Would eminent domain occur if the university was private? It has happened in the passed. An especially egregious instance occurred in New London, CT in 2001. GM was given land to build the Poletown factory in Detroit in the 80's. http://en.wikipedia.org/wiki/Kelo_v._City_of_New_London
Nicholas Urfe
Sun, Apr 21, 2013 : 2:32 p.m.
It is time for an income tax on university employees who earn more than $125K a year.
Ron Burgandy
Sun, Apr 21, 2013 : 2:28 p.m.
So, let me get this straight.....if you're an illegal alien, here in the U.S., U of M students will throw a protest and are willing to get arrested demanding in-state tuition for you, but if you're a U.S. taxpaying citizen and the University is trying to force you to part with your property....nothing. What a distorted view of social justice.
dancinginmysoul
Sun, Apr 21, 2013 : 2:19 p.m.
The delightful slogan "Ann Arbor: 6 square miles surrounded by reality" should probably be changed to "Ann Arbor: Owned by the University of Michigan."
trespass
Sun, Apr 21, 2013 : 2:19 p.m.
It is interesting that the University claims it is taking the property for public use but when they want to give someone a trespass warning they claim the rights of a private property owner. No one ever said the legal arguments had to be consistent.
JimB
Sun, Apr 21, 2013 : 2:08 p.m.
This is unjust! What if Copi saved every penny through his lifetime to purchase these rental properties, figuring he would have an income to last through retirement age, only to have the U of M snatch this away. Is this what the school teaches in its business classes?
aarog
Sun, Apr 21, 2013 : 3:43 p.m.
He didn't, try again.
JBK
Sun, Apr 21, 2013 : 2:07 p.m.
The University paid South Division Street Properties, LLC, a company registered to former athletic director William Martin, $3.17 million for four properties in the area. According to Ann Arbor city tax records, the four property's assessed value was $845,200, giving them an approximate market value of $1.69 million AND we wonder why tuition is so high! :) UM almost paid twice as much as they ARE worth. :)
aarog
Sun, Apr 21, 2013 : 5:12 p.m.
typo - "a d" to And make viable suggestions...
aarog
Sun, Apr 21, 2013 : 3:42 p.m.
Numerous posters have tried educating us that building money is wholly separate from tuition and could not be used for tuition or scholarship if they wanted. Time to understand that a d make viable suggestions for tuition relief.
Elijah Shalis
Sun, Apr 21, 2013 : 2:02 p.m.
So AnnArbor.com is Munger a U of M drop out or not?
C. Montgomery Burns
Sun, Apr 21, 2013 : 1:58 p.m.
Isn't there already enough vacant space over at North Campus or at the former Pfizer site the University of Michigan should be using for expansion? They already own it and it wouldn't take anymore taxable real estate away from the City of Ann Arbor. Sure, I'm sure they will say it is too far from Central Campus, but that's why they have buses.
1bit
Mon, Apr 22, 2013 : 12:04 a.m.
Does that mean we can release the hounds?
aataxpayer
Sun, Apr 21, 2013 : 1:49 p.m.
Ann Arbor taxpayers are getting squeezed again by UofM. Not only will over one million in accessed tax value be eliminated, but another dorm will also compete with the private market, lowering rental property values and lowering tax revenue even more. At what point will UofM recognize that it needs to stop buying taxable property? At this point roughly 2 of 3 people that live in the Ann Arbor Metropolitan Statistical Area live outside the city and do not pay city taxes. The tax premium to live inside AnnArbor is about 50% and likely to increase if UofM doesn't change its policies. If the situation doesn't change people in the city start to move out, the downtown will decline, and city will decline rapidly. Will our mayor address this, or would that put his salary from UofM at risk?
blue85
Mon, Apr 22, 2013 : 3:56 p.m.
"@ Blue85 - I think people do move out of the city to avoid taxes. At this point it is tolerable and the city isn't in steep decline, but there comes a point where taxes will simply get to high if the U keeps undermining the tax base." Your argument is plausible, but I've yet to see a single complainer on this topic produce a usable analysis: 1) what is the amount that would be paid for the buildings that existed before U purchases?; 2) what economic value does the U add for the buildings purchased by way of salaries and support for local businesses?; 3) to what extent do U purchases inflate local values?; 4)to what extent do the inflated values lead to higher tax receipts for local government? 5) how differential are the tax rates between Ann Arbor and some random city where the access to medical care and other U provided benefits NOT exist?; 6) clearly the U has deep pockets, but where is the alternate bid going to come from? In other words, in the absence of the U, for inter alia the Pfizer property, who would have stepped up, bought the property and supported the local tax base? To postulate the deleterious effect of the U, you'd have to have a 2nd and or third and or n-th economic player. Who are those players? As I've stated repeatedly on these pages: the university forgives a lot of bad debt (mostly medical) and pumps buckets of cash into the local economy; the U also maintains its footprint at or above the local standard. Why do people focus on $12MM or so in lost taxes when the overall economic contribution to Ann Arbor is $6,000,000,000 per year? In sum, while your point is fair, I've never seen a single analysis of the presumptive harms, while the manifest benefits are just that.
Umlud
Sun, Apr 21, 2013 : 10:36 p.m.
@aataxpayer, you said that the University doesn't have a single fire department that they paid for. Uhh... Perhaps you didn't know that the University has housed and has paid for Ann Arbor Fire Station 5. Although it's not a fire station that is exclusive to the University, it is done as a cost-sharing program between the University and the city. In addition to building and maintaining Fire Station 5, the University has purchased fire engines for AAFD. Therefore, while this isn't exactly the same thing as what johnnya2 described, it actually does actually show that you don't know what you're talking about.
Brad
Sun, Apr 21, 2013 : 8:34 p.m.
"Will our mayor address this, or would that put his salary from UofM at risk?" I'll be emailing mayor/council asking how they prepare to address this. Again, it's a terrible precedent. They ran out of room and need those houses? So how long before they'll "need" the houses on the other side of Division?
aataxpayer
Sun, Apr 21, 2013 : 7:05 p.m.
@ Blue85 - I think people do move out of the city to avoid taxes. At this point it is tolerable and the city isn't in steep decline, but there comes a point where taxes will simply get to high if the U keeps undermining the tax base.
aataxpayer
Sun, Apr 21, 2013 : 7:02 p.m.
@johnnya2 -Your reply reeks of using a false straw man argument. Also, to say that AA doesn't provide services to the U is simply wrong, or did the U open a fire department I didn't hear about?
blue85
Sun, Apr 21, 2013 : 4:45 p.m.
"The tax premium to live inside AnnArbor is about 50% and likely to increase if UofM doesn't change its policies. " If true, the premium must be associated with higher values. Why don't the owners simply sell out and move 5-10 miles to a cheaper locale? This would be the perfect arbitrage...unless you are wrong and markets are not distorted. Are the markets around AA really that inefficient?
aarog
Sun, Apr 21, 2013 : 3:39 p.m.
Tax premium of 50%, blamed on the U? Hmmm, look up Ypsi, bad Eastern, bad.
johnnya2
Sun, Apr 21, 2013 : 3:03 p.m.
Your argument reeks of the "nobody goes there anymore, it is too busy". The U is a SEPARATE entity just as the city is. Let's put this in perspective. The airport is surrounded by Pittsfield Twp, But is is actually City property. The city does not pay property tax for the airport. the U could buy a property on Macinac Island and it does not pay property tax there since it is a SEPARATE entity. that property is no longer the responsibility of the city for any city services. In fact, a city of A2 parking official can not ticket on UM meters and vice versa., just as a city of Ypsi meter raid can not come into A2 and ticket them.
Morty Seinfeld
Sun, Apr 21, 2013 : 1:42 p.m.
Perhaps the University of Michigan should start practicing what it preaches when it comes to fair and just social stewardship, especially when it effects their own local community.
blue85
Mon, Apr 22, 2013 : 3:47 p.m.
Yes, how dare the university pay over market value for a property to complete a project! How dare they not pay beyond the premium offered. How dare they try to minimize costs to the university and the students. I agree, they should pay an extortionate amount for the property and pass that through to students. Student debt is low and state contributions are fair so why not charge way above market. Clearly, a failure to overpay is a failure of stewardship. Clearly, boosting local property values and raising the rate paid by tax paying entities short changes the city coffers. How dare they replace a collection of cruddy buildings with a shiny new dorm...what are they thinking?
fisherman
Sun, Apr 21, 2013 : 6:56 p.m.
So, what exactly does the University preach about social stewardship? I was unaware that they had a policy here.
You Don't Say
Sun, Apr 21, 2013 : 1:41 p.m.
To bad the U doesn't want to locate the dorm on South State to replace the eyesore housing on the east side of the street. Can't get down on the U to much since they are Ann Arbor's bread and butter revenue stream. Besides their buildings do look nice. Unfortunately insider deals and trading are a way of life these days and Bill Martin was one of the biggest crooks out there. How do you think he made all his millions? By following the rules? His legacy at the U is that of the biggest doofus ever. Spent millions and made poor hiring decisions.
aarog
Sun, Apr 21, 2013 : 3:37 p.m.
I wish the U would want my property even though its fairly new. Bummer I live a few miles away.
Billy
Sun, Apr 21, 2013 : 1:20 p.m.
""It was determined at that point that the parties were so far apart that an agreement simply could not be reached right then," he said." So which is it....a guy who just doesn't want to be bullied by U of M? Or someone playing the "hold out" game, hoping to extort big bucks out of deep pockets? Cause it's pretty much one or the other here...
blue85
Mon, Apr 22, 2013 : 3:45 p.m.
"Plus in your example then Martin would be a bad thing to do, because he got much more than market value, so the students lose in your example." No, this is your first coherent observation: more money to Martin is less to the U and an expense to students, that is indisputable. I'd be happy to see the buy and sell levels reviewed under arbitration. "Except that in your example, I suppose it was wise, because they were betting on a future gift?" Nope, as above, your observation is OK. However, there is some probability that they will get a gift. The gift is not a certain, and, again, I'd be OK with the levels and Martin's activity being reviewed. "Which actually makes it seem quite illegal. I can't find any scenario in your example that's good or sensible."" I think you are way off on a tangent with this one. Martin may have done something wrong, but that is subject to analysis and investigation. I think eminent domain coupled with arbitration is the way to go. I don't see following laws as a bad thing nor eminent domain as inherently a bad process. I'm happier to see money go into Martin's pocket because he is an alum with a past history of making donations and a probable future donor. I don't have the ability to calculate this probability, but I'm betting it is higher than the same money in the pocket of some random guy with no history of donation. I don't like seeing Martin make money improperly, if that is what happened. I'd prefer the Munger gift be undiluted. All of that said, re-read the post by Billy that I responded to and what I responded given the constraints his note imposes, then look at your note with its many tangents. Try to stick to the argument and not hijack an individual thread to make a point you could make elsewhere...what you're doing just muddles the conversation to no end.
blue85
Mon, Apr 22, 2013 : 3:36 p.m.
"The U is infinitely worse because they are purposefully making use of the eminent domain law. That's why they're infinitely worse." Oh, OK...now I get it...entities which make use of laws are bad...not just bad, but infinitely bad? So you are arguing that laws in generally should be abolished in order to bring about infinite good? "Plus that Martin example you used doesn't make sense. Are you saying that since the current owners are less likely to contribute millions to U of M then it's good that U of M takes the property via eminent domain?" No, if the university follows the law, then that is all that is required of them. I'm not saying that a donation makes following the law good...following the law is good and the U getting donations is also good, therefore two good events. "How does one assess the likelihood of a future gift to the U of M from someone?" I don't have a calculator, but Martin has gifted monies in the past and I'm guessing that he will do so in the future. He also worked as a dollar a year guy, which is a donation. "If every expenditure the U of M makes is taking dollars out of the pockets of students, then they have a lot more reductions in spending to make," This makes zero sense. None. What are you really trying to say? That education should, despite university expenditures, be completely free? " and buying up more preoprty when they already own so much would be one, don 't you think?" I don't think so, and you are simply aren't thinking: what is the right level of property for the U to own, given its headcount and research? I haven't a clue, what is your source of knowledge?
RUKiddingMe
Sun, Apr 21, 2013 : 5:07 p.m.
The U is infinitely worse because they are purposefully making use of the eminent domain law. That's why they're infinitely worse. Plus that Martin example you used doesn't make sense. Are you saying that since the current owners are less likely to contribute millions to U of M then it's good that U of M takes the property via eminent domain? How does one assess the likelihood of a future gift to the U of M from someone? If every expenditure the U of M makes is taking dollars out of the pockets of students, then they have a lot more reductions in spending to make, and buying up more preoprty when they already own so much would be one, don 't you think? Plus in your example then Martin would be a bad thing to do, because he got much more than market value, so the students lose in your example. Except that in your example, I suppose it was wise, because they were betting on a future gift? Which actually makes it seem quite illegal. I can't find any scenario in your example that's good or sensible.
blue85
Sun, Apr 21, 2013 : 4:42 p.m.
"Regardless of which of these 2 scenarios it is, the eminent domain issue makes U of M the bad guy by FAR. No matter how greedy the owners are, U of M deciding to go the eminenet domain route is infinitely worse. There is no question that the U needs to lose this fight, and suffer a major blow to their reputation." If you agree that it might be owner greed, how is the U infinitely worse? Isn't it true that every dollar that goes to the private owner comes out of the U,and therefore however indirectly out of future student's pockets? With Bill Martin, you at least have the probability of some of the money coming back through a future donation...whereas that probability is probably negligible relative to the current owners.
RUKiddingMe
Sun, Apr 21, 2013 : 1:30 p.m.
Regardless of which of these 2 scenarios it is, the eminent domain issue makes U of M the bad guy by FAR. No matter how greedy the owners are, U of M deciding to go the eminenet domain route is infinitely worse. There is no question that the U needs to lose this fight, and suffer a major blow to their reputation.
jayroo
Sun, Apr 21, 2013 : 1:18 p.m.
I think Sam Copi is smart to hold out until they are compensated fairly. They have 15 bedrooms between the two houses. If the rent is $500 a month per bedroom that is $7500 in monthly income and $90,000 per year. If Copi were to rent these out for another 20 years that would be $1,800,000 in income without even factoring in rent inflation. I would hold out for a fair number too as this is their family business and certainly effects their bottom line.
blue85
Sun, Apr 21, 2013 : 4:39 p.m.
A $1,000,000 (e.g., for illustrative purposes...you can scale the logic) property will be charged 2.5% in depreciation per annum or $25,000/million/year in this example, for loss of economic value. In other words, the property is degraded by that amount each year due to loss due to normal wear and tear. So in your example, the 20 year loss would be $500,000. That is a shelter to income that all Ann Arbor resident pay indirectly via tax code provisions. The owner will have the cost of real repairs and taxes. The owner will also have an opportunity cost implied by not investing in a passive index like the S&P...at 9%/year (UM's portfolio return)...the loss is in the millions (though realistically there are periods of loses where this would be a gain,so it it period sensitive). The point is, the $1,800,000 you mention is a start in the right direction, but there are many, many complexities in such a calculation...and the loss could be millions relative to a stock portfolio, but the possible gains are pretty bounded. Who will calculate and settle the level? That is one reason why eminent domain and arbitration make sense for a case like this.
johnnya2
Sun, Apr 21, 2013 : 2:57 p.m.
Except that has NOTHING to do with FMV, but made up numbers out of your rear is typical of those who do not understand property values. You probably think because you put a new roof on yoru house it is now worth double what you paid
C'est la vie
Sun, Apr 21, 2013 : 1:13 p.m.
"The University paid South Division Street Properties, LLC, a company registered to former athletic director William Martin, $3.17 million for four properties in the area." William Martin of South Division St Properties LLC purchased 1 of the 4 properties, 401 E. Madison, for $1.8 million on 3/27/2012. Doesn't take a FOIA to get this info, just city website's property search. The other 3 properties would appear to have been purchased at fair market value. Martin went above and beyond to get this final jewel in the crown.
Solitude
Mon, Apr 22, 2013 : 1:14 a.m.
One would have to wonder if Martin was privy to the future plans of the U, leading him to acquire the property in anticipation of selling it back for a profit, at the expense of taxpayers who fund the University.
Howard Beale
Sun, Apr 21, 2013 : 1:04 p.m.
Bill Martin should have donated that property to U of M as compensation for his role in picking RichRod....lord knows what that train wreck of a decision ended up costing U of M!
Resident A2
Sun, Apr 21, 2013 : 1:01 p.m.
Unbelievable. Before long there will be no private property in downtown Ann Arbor. Once again, diminishing the tax rolls!
Hugh Giariola
Sun, Apr 21, 2013 : 12:39 p.m.
I really hope the U loses this one.
jcj
Sun, Apr 21, 2013 : 12:32 p.m.
Ben WHEN was Bill Martins property sold???
Brad
Sun, Apr 21, 2013 : 12:28 p.m.
Still waiting for that first peep out of the mayor/council on this hostile takeover attempt on city property owners and taxpayers. Seems like a really bad precedent - one that should be questioned and possibly fought. Well - unless they already approved everything through a back-channel.
Solitude
Mon, Apr 22, 2013 : 1:11 a.m.
Don't hold your breath waiting for the mayor. He's on the university payroll, remember?
RUKiddingMe
Sun, Apr 21, 2013 : 12:26 p.m.
Why is the the suspicious purchase of these properties by a U of M insider and then sale of them to U of M for a massive profit a couple years later not being looked into here? Is this not a detai, worthy of attention? Has someone in A2.com already deemed this as appropriate, above board, nothing wrong? I feel like 23 Kwames live in this town.
Stuart Brown
Tue, Apr 23, 2013 : 4:09 a.m.
Lizzy, A simple google search of "construction cost for dormitory" resulted in a site at: http://www.reedconstructiondata.com/rsmeans/models/college-dormitory/ which said the average construction cost for a dorm is about $200 sq/ft. UofM is spending $500 sq/ft on the proposed dorm. I find it offensive that a public university should be spending 2.5 times the average in construction costs for a building. The fact that it is donated money that pays for most of the cost is not relevant; these donated dollars could go a lot further and help more students achieve their goals if the money was not squandered on inflated construction costs. In other words, housing for 2.5 times more students could be had if costs were in line with national averages. These costs lead me to wonder if Mr. Martins plundering of a public university is simply the tip of the iceberg. What other quid pro quos or outright kickbacks exist when 2.5 times the money is spent to build a simple dorm? Another point, I looked at the cost of UofM dorm room & board and compared it to the ICC over the last 30 years; long story short, the ICC's cost were in line with inflation while UofM's costs were about 50% a year over inflation. UofM pays no property taxes, gets construction money from donations made by wealthy people and still cannot manage to keep their charges to students in line with inflation.
RUKiddingMe
Sun, Apr 21, 2013 : 12:47 p.m.
Thank you Lizzy, your efforts are appreciated.
Lizzy Alfs
Sun, Apr 21, 2013 : 12:36 p.m.
@RUKiddingMe: I am looking into and have a couple FOIA requests that will hopefully shed light on the situation.
viacell
Sun, Apr 21, 2013 : 12:23 p.m.
Ann Arbor cannot let this land grab happen. University has to negotiate fair market value for the property.
Solitude
Mon, Apr 22, 2013 : 1:10 a.m.
Johnnya2, the law is not that the U, if they prevail, will pay fair market value. Michigan law requires the payment of "not less than 125% " of the property's fair market value, "in addition to any other reimbursement allowed by law." http://www.legislature.mi.gov/%28S%28ggazp4veaiilmm45kwldgq45%29%29/mileg.aspx?page=GetObject&objectname=mcl-Article-X-2
Sparty
Sun, Apr 21, 2013 : 7:55 p.m.
Ann Arbor has nothing to do with it. it's in the hands of the owner to either accept the offer, or it will be up to the Courts to decide.
johnnya2
Sun, Apr 21, 2013 : 2:55 p.m.
The law IS that they will pay FMV. The FMV changed once the Martin property purchases are done. FMV is based on similar properties recent sales.
jcj
Sun, Apr 21, 2013 : 12:31 p.m.
My only disagreement is they need to negotiate ABOVE fair market value just like they did with Bill Martin.
motorcycleminer
Sun, Apr 21, 2013 : 12:18 p.m.
Big blue just like the DDA and prince john will get what they wants one way or the other....
RUKiddingMe
Sun, Apr 21, 2013 : 12:09 p.m.
A lot of news organizations should be making a big deal about this. People should be just as mad about this as they got about Wall Street. The greed and disdain for the average citizen are right out in the open here; this school has plenty of property they can use, the city already struggles with gthe loss of tax base, etc. This is a good opportunity for people to learn that the U doesn't care about Ann Arbor or the people in it; they are the same as Bank of New York or Goldman Sachs; they just want to build and get bigger and raise tuition and get more gifts and make more money and get bigger. The use of eminent domain here is absolutely disgusting. I am disgusted.
Umlud
Sun, Apr 21, 2013 : 10:46 p.m.
Jay: I'm sorry, but you contend that the University will start competing with local businesses. Could you please point out where the U competes with any of the businesses along State Street? Are you saying that the U will open up some party stores and some university-catering delis? Are you saying that university-owned clothing stores will compete with the privately owned university apparel stores? That the computer science department will push out Google and Barracuda? That the Law School will push out the bail bonds on Huron? I'm sorry, but if you think that the university will start competing against businesses, I've got a bridge to sell you.
Jay Thomas
Sun, Apr 21, 2013 : 6:30 p.m.
B2Pilot: If the U continues to gobble up the town and compete with existing businesses, then making a living off the U will get harder and harder.
RUKiddingMe
Sun, Apr 21, 2013 : 4:17 p.m.
B2, I'm not sure what problem you mean in "therein lies another problem." Also, the United States benefits from Wall Street and the stock market; that does not mean Wall Street can do no wrong. In fact, it's often when things reach a certain size and a certain amount of money that things become problematic. Also, I agree whoever owns this property will make out well. In fact, they probably would have done quite well with whatever the initial offer was. That changes nothing about this issue.
B2Pilot
Sun, Apr 21, 2013 : 1:47 p.m.
Well there in lies anothe problem if you state these houses look better than most. & you have your problems with the slum lords in this city also. . And as far as the U purchasing tax generating property and not paying for it, isn't the city doing the same thing purchasing property OUTSIDE of the city in neighboring townships? This is a Univeristy town A2 survives off the U, I would contend A2 benefits from the U, the Univeristy police force for example adds tremendous resources to Washtenaw county sheriff & city police at no charge that isn't available to othe police forces, I could go on and on. The problem isn't the U it is city tax policies I'm sure this slum lord will make out nicely even if it has to go to arbitration
RUKiddingMe
Sun, Apr 21, 2013 : 1:27 p.m.
B2, for one thing, these two houses in the picture look better than almost 60% of all the student rentals in town, including much higher-profile ones (e.g. on the gateway to campus State Street). For another, the rundown nature or number of garbage carts has nothing whatsoever to do with this issue. Eminent domain doesn't apply to "our building will look better." I have my own problems with the slummy properties and crappy landloards in this town; none of that means anything when the spending behemoth of U of M decides to add hostile takeover to their already substantial list of absorption of previously-tax generating properties.
B2Pilot
Sun, Apr 21, 2013 : 1:08 p.m.
looking at the pictures with the 1/2 dozen dumpsters and grill on the porch why would you want these houses protected? they are run down slums. the small tax's they generate probably create more problems with code compliance, etc. UofM does a better job of maintaining the campus than city does. Also Division street where these houses are located was named as the dividing line between the city and the University campus. A2 seeing the economic advantage has grown around the campus which makes the campus unique. It also is why A2 governement gets more money than neighboring cities. The problem isn't UofM dosn't pay taxes it is what the city is doing with the tax money it does get. Buying land outside of the city you can't step foot on multiple administrators, DDA The city gets plenty of tax money they are just not spending it for the benefit of the citizens
a2 Brute?
Sun, Apr 21, 2013 : 11:27 a.m.
Just when the gun control lobby started to gain some traction the libs running the university give a rude reminder of why people don't trust the government.
roadsidedinerlover
Mon, Apr 22, 2013 : 2:52 a.m.
There are several Republicans on Board of Regents...so much for your argument about "libs". :(
murphthesurf
Sun, Apr 21, 2013 : 11:25 a.m.
wow! if you won't give it to me i'll just take it !! the U.OF M. is becoming a ' BULLY'! MARTIN GOT 3.17mil for his property that was valued at $1.69mil ? nice profit for him,who says the u of m doesn't take care of their retirees!!!!
Jay Thomas
Sun, Apr 21, 2013 : 6:25 p.m.
Martin is wealthy enough just from his ownership at Bank of Ann Arbor and doesn't really need this. He got inside information here and decided to profit off of the U and the generosity of Charlie Munger. There is no other explanation for the quick flips. It is no different than the case of uber wealthy Martha Stewart using information to save herself a few dollars that wouldn't have affected her life in any meaningful way.
blue85
Sun, Apr 21, 2013 : 4:30 p.m.
"The owners of these two properties can ask for their property values to be reevaluated. The fac tis FMV will increase due to UM paying what it did for the Martin properties. Funny how many property owners want FMV to be as low as possib le when it comes time to pay taxes and want it higher when it is time to sell., If his FMV was too low, why wasnt he going to the tax board saying you have assessed me too little?" Excellent point!!! People want UM to pay for monies as yet unearned, that is, to look forward. Why not give the town a look-back: if UM pays out the higher figure, merely argue that the value was initially understated for the first 100 years or so and clawback the taxes which SHOULD HAVE BEEN assessed under the newly discovered higher value? Doing a look back would be symmetric and offset taxes which will not be paid. So, I agree with your point and await a new claw back program...after all if Ann Arbor residents want compensation for things that have yet to occur, why not tax for events which might have happened but did not?
johnnya2
Sun, Apr 21, 2013 : 2:52 p.m.
The owners of these two properties can ask for their property values to be reevaluated. The fac tis FMV will increase due to UM paying what it did for the Martin properties. Funny how many property owners want FMV to be as low as possib le when it comes time to pay taxes and want it higher when it is time to sell., If his FMV was too low, why wasnt he going to the tax board saying you have assessed me too little?
GoNavy
Sun, Apr 21, 2013 : 2:24 p.m.
@jcj- Yes, my mistake. You are correct.
jcj
Sun, Apr 21, 2013 : 11:59 a.m.
Navy Reread the comments and article/ murphthesurf is EXACTLY right According to Ann Arbor city tax records, the four property's assessed value was $845,200, giving them an approximate market value of $1.69 million.
GoNavy
Sun, Apr 21, 2013 : 11:44 a.m.
Assessed, not valued. The assessed value of a property is half of its market value, as required by the State of Michigan.
a2citizen
Sun, Apr 21, 2013 : 11:14 a.m.
The existing rental properties are available to anybody willing to sign a lease. The dorms the U-M proposes iare for graduate students only. How exactly will that be for a greater public good?
a2 Brute?
Mon, Apr 22, 2013 : 12:03 a.m.
An in-state person studying, wait for it, public policy at the Ford school can sign a lease with the Copi's. A foreign national can sign a lease with Copi Properties. An out of state student can sign a lease with the Copi's. But only a select few graduates will be able to live at the proposed dorms. So is the U-Ms proposal really for the GREATER public good? Or the good of a wealthy few. The U-M is willing to pay $185 million to house 600 students. At $308,000 per student I would say the 12 rooms the Copis own are worth at least 3.7 millon.
Jay Thomas
Sun, Apr 21, 2013 : 6:20 p.m.
I don't see that the public good is served anymore by someone leaving a dorm to go to class then leaving a house to go to a job. There isn't really a housing shortage so eminent domain shouldn't apply.
a2citizen
Sun, Apr 21, 2013 : 4:53 p.m.
What part of "anybody" is it that you don't understand?
blue85
Sun, Apr 21, 2013 : 4:26 p.m.
So if an in-state person (member of the public) goes to UM (a public institution) to study...wait for it, public policy at the Ford school, would you argue there is no public good involved? As to the current rental properties where anybody can sign,would you consider a foreign national part of the public? Please make your answer consistent with any of your prior complaints about foreign nationals and out of state students attending UM.
tdw
Sun, Apr 21, 2013 : 11:10 a.m.
If it's for public use does that mean I can go and hang out there if it gets built ?
blue85
Sun, Apr 21, 2013 : 4:23 p.m.
The Oval office is for public use...do you want free right of ingress there as well? How about the gold repository at Fort Knox...do you want to picnic there? There is probably a nice bio-weapons lab at Fort Mead...might be a nice vacation spot for you and your entire family...check it out.
johnnya2
Sun, Apr 21, 2013 : 2:49 p.m.
You can go there. The federal court building downtown is for public use, but you cannot go wherever you want in the building. The SOS office is for public use,. but go ahead and try to enter the back office. Your argument is silly
1bit
Sun, Apr 21, 2013 : 10:45 a.m.
I hope the parties work out an amicable agreement. Using eminent domain is a really crummy move and the value of the properties, since they are income-generating, is significantly greater than assessed value. Finally, @Ben, was there any dissension amongst the Regents about using eminent domain? Should any property owner next to U of M be worried? Angelo's and Dominick's have prime real estate next to major U of M facilities, I wonder why eminent domain was not used on them in the past? (And I'm grateful it wasn't!)
1bit
Sun, Apr 21, 2013 : 8:27 p.m.
@Jay: That's a great observation.
Jay Thomas
Sun, Apr 21, 2013 : 6:14 p.m.
Billy, he is a private landlord with many other houses and this number of units being built is going to be a big supply/demand problem for him. It's not always about what is offered.
just4thought
Sun, Apr 21, 2013 : 3:14 p.m.
Billy... did you ever think that maybe the owner does not want to sell. It should be his choice, not decided for him.
Billy
Sun, Apr 21, 2013 : 1:23 p.m.
I don't be cause of this line...""It was determined at that point that the parties were so far apart that an agreement simply could not be reached right then," he said." I'm pretty sure U of M was offering him more than fair market value (look at the statements Blimpy's owner made regarding U of Ms offer to her) and he wanted WAY more than that. IF that's the case....I hope they do take his properties under eminent domain...and he receives significantly less than was offered initially. Extortion is extortion....don't care who it's against.
Chip Reed
Sun, Apr 21, 2013 : 10:21 a.m.
Maybe the U-M could do like they did at Huron & State with the old Carnegie Library facade and incorporate the front part of the houses into the design.
Umlud
Sun, Apr 21, 2013 : 10:51 p.m.
@Dirty Mouth: Although you may have gone to Ann Arbor High School, you are apparently forgetting the actual history of that building (or you are correctly recalling a fatuous history). From the Ann Arbor Observer's web page titled "Ann Arbor's Carnegie Library": "At the time it was built, Ann Arbor's Carnegie Library was believed to be the only one in the country attached to another building. But it was a natural pairing in a town where the library and the high school had already been associated for nearly fifty years. "
Chip Reed
Sun, Apr 21, 2013 : 9:44 p.m.
Kind sir, I have the highest regard for my elders, and I can see why your experiences would cause you to respond as you have, but when they first built the school, they had money from Andrew Carnegie for a library. Before the addition, it stuck out from the rest of the building and was used by both students and townsfolk. I was just referring to the facade, which says "Carnegie Library" right on it.
Dirty Mouth
Sun, Apr 21, 2013 : 9:16 p.m.
With all due respect, I went to Ann Arbor High School before it was purchased by the UofM and renamed the Frieze building. I can attest to the fact that It was never the Dale Carnegie Library. Don't always believe what you read.
Chip Reed
Sun, Apr 21, 2013 : 8:10 p.m.
@Dirty Mouth-See page 112 of "Ann Arbor in the 20th Century" for a fine shot of the Carnegie Library facade that I was referring to.
no flamers!
Sun, Apr 21, 2013 : 1:18 p.m.
Sorry, but why would you want the front part of these two dilapidated homes incorporated into the facade? This dispute has nothing to do with saving architecturally significant structure b/c these aren't; it is about the value of the property.
Dirty Mouth
Sun, Apr 21, 2013 : 1:06 p.m.
That wasn't the Carnegie Library facade, but the old A2 High School. They simply disguised it with a Library carved lintel. Interesting, in addition to bullying folks out of their property the University also rewrites history.
Ricebrnr
Sun, Apr 21, 2013 : 10:20 a.m.
Wow its things like this that make people fear government. China has a policy like this also. Look up "China nail houses" The ask nice, then they "give just compensation" and take it.
Ricebrnr
Mon, Apr 22, 2013 : 12:41 p.m.
Right, standard AA fare. Its ok to take and trample individual rights so long as other more enlightened people think its for the greater good. Sure it may be a simple money grab and negotiating dance. But who the hell are you people to determine that for this property owner? And why should the University be able to threaten to take, yes take something which is not for sale? That you are fine with this and don't see the implications is as worrisome.
blue85
Sun, Apr 21, 2013 : 4:21 p.m.
As aarog notes, the owners are being "inconvenienced" by being offered something like double market price. The university needs the property to complete a parcel, the owners recognize the scarcity value, and maybe a 2X mutiple is fair...that they won't accept a 100% premium hardly makes them victims in this story. The university will be around, barring a nuclear war, for another 1000 years, and bring stability to the town in a way formerly provided only by medieval cathedrals. Exercise of eminent domain within its natural footprint should not be a shock and is probably a reasonable use of the power, especially at the premium price.
aarog
Sun, Apr 21, 2013 : 3:26 p.m.
China doesn't give market prices. The most popular nail house owner who held out was given less than half his actual cost. While I am not supportive of this use her, at least the offer is double market value and much higher than actual cost.
BigMike
Sun, Apr 21, 2013 : 10:17 a.m.
And UM would pay no property tax once they own it...
neutrality
Mon, Apr 22, 2013 : 5:49 a.m.
i agree with some of what you have said. What I am wondering is why are they not building over by the Northwoods housing areas. Those areas of single level or double level housing that are never filled could be replaced or expanded. I used to live in Northwood 5 and the buildings around me were always 1/5th empty all year each year. Maybe I missed something in previous reporting of this, but why does it have to be here when there is so much space on the north campus area, and those big almost always empty parking lots by Huron Parkway.
Umlud
Sun, Apr 21, 2013 : 11:23 p.m.
Are you saying that we should start having the churches and temples pay property taxes? Or should the owners of these buildings that are only really heavily used one day out of the week (and who are also given free street parking, even though there is normally no street parking in along their property) also be allowed to continue paying no property taxes? What about on new lands that they acquire?
Jay Thomas
Sun, Apr 21, 2013 : 6:10 p.m.
I agree that this is state matter. The legislature should be taking steps to protect property tax payers from this endless burden shifting. 600+ untaxed units of housing now competing with all the other new housing going up to address any need for it. But what would you expect from a University that opens an untaxed coffee shop to compete with taxpaying coffee shops. Oh, and U of M forgives nothing; that cost is simply passed on to everyone else. Sheesh!
blue85
Sun, Apr 21, 2013 : 4:17 p.m.
No, they won't pay property tax, but, as another poster notes, this is typical for not-for-profit entities, so what is your point? Are you prepared to reclassify all such entitities? UM forgives over $125,000,000/year in unpaid medical bills. The university also provides support for local property prices,and, as we can see here, is the high bid within its footprint, thus backstopping prices in some sense. The university also provides employment for 40,000 faculty and staff. The students who attend provide the foundation for an entity which injects $6Bn/year into the local economy and with its reputation puts Ann Arbor on the map in a global fashion. In light of all of that, are you really sweating the property tax foregone? Why not move to another town where you won't be inconvenienced by the prosperity which UM brings to the area which raises those taxes. Try a town where the properties are not worth so much.
johnnya2
Sun, Apr 21, 2013 : 2:47 p.m.
City does not pay property tax. The USPS federal building on prime real estate downtown does not pay property tax. NO church in the city pays property tax. The fire stations do not pay property tax. If you do not like the constitution, CHANGE IT. Otherwise it is a boring tired argument.
een
Sun, Apr 21, 2013 : 1:04 p.m.
Great point, @BigMike. It's wonderful to see the university growing so rapidly, but it's about time they start offering a yearly stipend to the city. For every new property the U snatches up, are A2 residents ultimately footing some part of the bill via higher property taxes?