Pizza House owners market development rights for 10-story tower above Ann Arbor restaurant
The tower designed to be built on top of Ann Arbor's Pizza House restaurant.
From J. Bradley Moore, architect
Now they’re ready to test the market and find a developer willing to build it.
The Tice family is working with Peter Allen, a University of Michigan real estate instructor and with local development connections. He’s marketing the property as a development opportunity on a long-term land deal for someone who wants to expand new student housing options.
“It’s a great location,” Allen said. “The question is, how deep is that market?”
Zaragon Place high-rise on East University started the wave of new student housing in Ann Arbor. The location is in the same block as Pizza House, and serves as a model for how the Tice family’s tower could function.
Two blocks east, the 601 Forest mixed-use high-rise with 600 beds is in the early stages of development, with the tenants of the existing buildings on the site moving out and the city looking at demolition permit requests.
And across the Diag, the 4Eleven Lofts and North Quad - built by the University of Michigan - are redefining the housing options for students seeking new construction in a high-rise environment. Zaragon Place 2 also is in development.
Timing, said Dennis Tice, is critical for a new project.
“Now’s the time,” he said.
“You’ll only be able to fill so many (new projects) with students,” he said. “… At some point, the market’s only so deep.”
But it’s deep enough to absorb a high-rise on his property because so much of the legwork has been done, he said.
The building specs were done by Ann Arbor architect Brad Moore.
The construction of the new Pizza House restaurant 3 years ago included specs that fit the new building for a 10-story high-rise - and possibly higher.
And the city’s rezoning of the South University area to allow high-rises in select areas clears the way on the municipal approval front.
However, the Tice family isn’t willing to sell the property - for obvious reasons. The restaurant will stay put.
And they don’t want to do the development.
That’s where Allen comes in. He’s crafting a way for them to turn the property into condominiums, with the restaurant as one ownership entity and the development rights above the property a second ownership entity, which is being offered on long-term lease to a developer who could build and operate new student housing.
“The creation of condos to separate the first floor and above is not unique,” Allen said. “What is unique is that they’d be renting it and not selling it.”
Allen is open to offers that he’ll present to the Tices.
“We’ve had interest from two local residential developers,” he said, declining to name them.
Any eventual deal is likely to be based on a 50-year lease - maybe longer - with the price based on a percentage of the net operating income, Allen said.
Tice, who co-owns the restaurant and the property with his father, Bill, and brother, Matt, said their vision for redevelopment on the property started in 1998.
“It’s something we’ve been thinking about for a long time … as we acquired property and the restaurant business grew,” he said.
At the time, the zoning wouldn’t allow the change. But Tice, active in the South University Area Association, helped drive rezoning in the district through a proposal that took shape in 2004.
“As things moved along, we kind of realized that we might need a partner or partners for something like this,” Tice said.
While Tice believes the market warrants new construction over Pizza House, he recognizes that financing could be an issue.
But he also says the South University is sustaining itself as “the high-rent district for campus,” and that adds to the appeal.
Adding to the residential base will eventually help the retail mix in the area, he added. That was an original goal of the rezoning and one that many are still looking for.
“It has to evolve on its own,” Tice said. “But I know it’ll happen.”
Comments
Joel Batterman
Tue, Nov 9, 2010 : 5:16 p.m.
Foobar 417 makes a good point, on the possibility of new high-rise construction allowing some student ghetto neighborhoods to transform back into single-family areas. As Atticus says, a lot of people like to have a yard, and that's fine. Judging by the state of a lot of yards on South State, though, I'm not sure all my fellow students have a desire for one. For what it's worth, this project would certainly cut down on carbon emissions from pizza delivery vehicles. That's the "power of proximity," as urban planners like to say...fresh out of the oven.
Speechless
Thu, Nov 4, 2010 : 5:50 p.m.
"... [Dennis] Tice, who co-owns the restaurant and the property with his father, Bill, and brother, Matt, said their vision for redevelopment on the property started in 1998.... At the time, the zoning wouldnt allow the change. But Tice, active in the South University Area Association, helped drive rezoning in the district through a proposal that took shape in 2004...." I suppose this helps explain why the Tice family for some years has shown solid support for recent and current city council members who have been the most active in encouraging larger development projects near downtown and campus. More than one election night party for these councilpersons has been held at Pizza House, and there have been a few campaign contributions as well. With this type of big project in the works, one can better understand why such political kinship has been cultivated. That said, this appears to be a good location for a large complex. It would be on the edge of a busy commercial and campus district, and not in the middle of a residential neighborhood filled with single family dwellings. As others point out, its presence if built will spur area slumlords to clean up their act.
Kai Petainen
Thu, Nov 4, 2010 : 5:33 p.m.
" Or it could just be another example of parking anarchy in A2" perhaps. in that case, they should include a rendering of a tow truck. =) btw.. neat building design.
rreidannarbor
Thu, Nov 4, 2010 : 2:11 p.m.
Perhaps they could give the new tower a 4-5 degree pitch and name it "The Leaning Tower of Pizza House". Hey, if the market will bear it and its well executed then it will work. (The blue car in the rendering is really on the correct side of the street. Because no one told us that this structure really is leaning, it does not appear to be on the correct side of the street. Or it could just be another example of parking anarchy in A2).
Atticus F.
Thu, Nov 4, 2010 : 12:04 p.m.
I realize this article is about student housing and there is some mrrit to building up, under SOME circumstances...But god forbid someone would want a garden in their back yard, or a workshop in their garage. I just get the sense some of these 'urban dwellers' are oblivious to the lifestyles of others. I personally like the idea of being able to work on my own car, grow my own veggies, and take care of my own home repairs, as apposed to relying on someone else to do it for me.
townie
Thu, Nov 4, 2010 : 11:39 a.m.
The market will decide if this idea has legs or not (I think not), but on a practical note, the restaurant's owners ought to be aware that there is no way they'll be able to keep their place open during significant periods of the construction schedule. There's not an insurance company in the world that will let you hoist steel, concrete, brick and other construction materials over top of an occupied building like that--especially a building where you are inviting large numbers of the general public inside on a daily basis. In addition to providing impetus for landlords to improve their rental houses as others have mentioned, the competition from a large supply of new units will also drive down rent prices in the new units themselves. What good is it to provide thousands of beds that only hundreds can afford? The question isn't how many students are available to fill the beds, but how many of them can afford to pay $900-$1000 per month--the price point at which it seems these new high rises are profitable for the developers.
Forever27
Thu, Nov 4, 2010 : 10:30 a.m.
@BC, you couldn't be more correct about which direction to develop. I have always felt that vertical expansion is the most economically and ecologically sound practice. I've also thought that converting rooftops into "greenspace" would help with energy consumption and the aesthetics of urban development.
BC
Thu, Nov 4, 2010 : 10:08 a.m.
From a city planning perspective, it's better to build vertically than to create sprawl. It should also encourage more underground parking, something Ann Arbor could use.
5c0++ H4d13y
Thu, Nov 4, 2010 : 10:06 a.m.
It's not really on top of Pizza House but in replacement of the house and driveway next door. If the rendering is correct. http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=pizza+house+Ann+Arbor,+MI&sll=42.270872,-83.726329&sspn=0.137695,0.256805&g=Ann+Arbor,+MI&ie=UTF8&hq=pizza+house&hnear=Ann+Arbor,+Washtenaw,+Michigan&ll=42.273911,-83.734574&spn=0.016417,0.032101&z=15&layer=c&cbll=42.274055,-83.734583&panoid=-x3i-SJsEwatmQNtTn_eTQ&cbp=12,298.95,,0,3.39 What better way to fill your restaurant and increase take out/delivery than filling a high rise full of students next to it?
Ignatz
Thu, Nov 4, 2010 : 9:31 a.m.
Parking, anyone?
John Alan
Thu, Nov 4, 2010 : 9 a.m.
The tall buildings will not make it.... Only time will show.... Talk to students who are living in University Tower. The new ones are renting about $900/$1000+/month for a little room. But these kind of development are good dreams. Again.... only time will show if they are going to make it... these are not the accomidations that students want and/or can afford.
belboz
Thu, Nov 4, 2010 : 8:39 a.m.
When the perimeter of Ann Arbor has such an abundance of empty buildings, I'm surprised at the continued support of downtown building projects like this. Not only can Ann Arbor streets not properly manage the current level of the population downtown, I was unaware that there was "new demand" for living quarters. Sure, it is competition, but driving down rent prices is not a way to beautify a city, it is a way to promote urban decay. As the ability to collect rents go down, the ability to pay for upkeep goes down, etc.
foobar417
Thu, Nov 4, 2010 : 8:39 a.m.
Personally, I hope that all these new student high rises "drain the swamp", so to speak, causing the student slums to at least partially revert over time back to single family housing. Students would get better choices and be more tightly integrated into campus and the "new old housing stock" freed up by the students would help diminish sprawl.
Atticus F.
Thu, Nov 4, 2010 : 8:22 a.m.
What type of fool would rent property in order to build a $100,000,000.00 high rise, when they could simply purchase the property next door and build?
Kai Petainen
Thu, Nov 4, 2010 : 8:07 a.m.
is the blue car (in the rendering) on the wrong side of the street?
Rhe Buttle
Thu, Nov 4, 2010 : 8:01 a.m.
So, from a men's store to a pizza restaurant to real-estate developers, eh? Never knew a haberdashery could be so profitable - but that was when men dressed like men. Oh well... sigh. Now everyone dresses like a third world beggar. Good for you Tice family. Glad to see an old Ann Arbor presence doing so well.
Killroy
Thu, Nov 4, 2010 : 7:49 a.m.
Cannot beat the location, location, location, but is this overkill with all the recent developments sprouting up? Just wondering?
MjC
Thu, Nov 4, 2010 : 7:03 a.m.
I'm all for it! These new student rental units put the pressure on landlords to spruce up the houses they hope to rent out (and lower rent). When my son attended the UM ('07), I couldn't believe the lack of decent rentals available - even the University dorm rooms were in sad shape.