You are viewing this article in the AnnArbor.com archives. For the latest breaking news and updates in Ann Arbor and the surrounding area, see MLive.com/ann-arbor
Posted on Tue, Apr 16, 2013 : 2:50 p.m.

Should we be worried about Ann Arbor's development boom?

By Lizzy Alfs

121912_BIZ_The_Varsity_MRM_01.jpg

The Varsity is being constructed near East Washington and South Division streets in downtown Ann Arbor.

Melanie Maxwell | AnnArbor.com

There’s no question that developers across the country have taken notice of Ann Arbor lately, but should we be concerned?

Michigan-based financial media outlet Benzinga posed that question in an article on Tuesday, where it called Ann Arbor a “developers’ dream city,” but also said the market, particularly for high-end student apartments, is in danger of becoming over-saturated.

Several “luxury” student apartment buildings have been constructed near downtown in recent years, including Landmark, 4-Eleven Lofts, Zaragon Place, Zaragon West and City Place. Meanwhile, The Varsity is under construction near East Washington and South Division streets, and City Council is debating a proposal for a 14-story high-rise at East Huron and South Division.

The article says the capitalization rates at these buildings — or the premium that a buyer pays over the property’s operating income — reached a 20-year low in Ann Arbor during the fourth quarter of 2010. However, cap rates have been rising since that year.

“All of the new development is raising fears that the city will soon become overdeveloped and also will jeopardize the existing architecture of the city that gives Ann Arbor the small town feel that it once had before the university grew to its current size,” the article says.

Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.

Comments

averageworker

Mon, Apr 29, 2013 : 7:41 p.m.

I think this question/discussion is multi-faceted. If you take just a glance around campus, you will see that the population of asian students increased drastically over the last 10 years- many of these come from afluent parts of this nation, or from even wealthier backgrounds in the fareast. There are NO problem to find students (or parents) who will write 1000$ a month rent. That being said, the rental properties around campus area are the worst I've seen in comparison to universities this scale- it is A SHAME on ann arbor to allow these to continue. I would rather some of these be purchased by families that want to live in the city long term and put efforts into restoration. To wrap up the package though, the city needs to continue to improve on public transporation, so that other less developed neighborhood may be accessible to students and university employees alike. I can think of at least 3-4 parts of the city where the bus is still not an optimal solution for commuting to campus/downtown.

JimmyD

Wed, Apr 17, 2013 : 7:33 p.m.

I'm waiting for the weakest tower to go bankrupt. I'll buy it for a song, remodel it for 2 or 3BR condo's and sell them for $300@. If I can get a hundred units out of it I'll gross $30M. I love capitalism. I'll even rent some to the A2 Low Income Housing folks too, if the price is right. (how much of this is sarcasm and how much is realism?)

ccb9

Wed, Apr 17, 2013 : 4:44 p.m.

I think it's great that Ann Arbor is growing but I don't think it should be only with student housing. What about all the people that live in Ann Arbor that aren't students?? In my opinion student housing has expanded too much into downtown, why not make high rise buildings downtown for non students, for those who love Ann Arbor and live and work here full time?

ccb9

Thu, Apr 18, 2013 : 3:31 p.m.

Jimmy D: if they made apartments for non students, they would obviosuly not be like that were you only pay for the room that you stay in and have 5 roommates living with you. They would make them just like any other apartment complex in Ann Arbor. Veracity: I agree, I don't know if there's demand for high rise for non students. I guess all I was trying to say is that I don't like that all of downtown is being taken over by student housing.

JimmyD

Wed, Apr 17, 2013 : 7:40 p.m.

'cuz non-students won't pay $1,000/month per bedroom in a six bedroom unit. (sorry, not trying to be flippant, but I think that's the gist of it.)

Veracity

Wed, Apr 17, 2013 : 7:37 p.m.

ccb9- First, you and I do not know if any demand exists among adults and families to live in highrise buildings downtown. I have lived 35 years in a neighborhood two miles from downtown and have no desire to live there. Secondly, building highrise apartments is expensive and is reflected in the costly leases. Few Ann Arborites are willing to pay the high cost necessary to live in a condo or an apartment downtown. Ashley-Terrace became bankrupt for this reason. Thirdly, I have heard at Connecting William Street informational meetings that young families will not move downtown because of the few parks available for use by children or for walking dogs. Food and other sundry shopping is not available within reasonable walking distances (for those who do not wish to always eat at restaurants). Cars will still be needed and parking can be inconvenient and costly.

rm1

Wed, Apr 17, 2013 : 4:35 p.m.

And speaking of undue whining, we keep hearing about the University "inhaling" all the tax base, when Ann Arborites have to pay for all those services. How can anyone actually believe that? Without the U's almost $6 Billion total budget -- expended in large part locally for salaries, services, rents, construction, etc., with the attendant ripple effects -- Ann Arbor would be much smaller, have vastly smaller local expenditures and generally be economically a backwater. And without the University-stumulated economic activity, the taxable value of AA property would be much lower. Note that much of that $6B research budget comes from out of the area and out of state. Two prime examples are (1) the payments of out-of-state tuition by about a third of the students, at rates something like three times instate tuition: and (2) the about $1.3 Billion research budget, largely funded by out-of-state sources.

upnorth45

Wed, Apr 17, 2013 : 1:09 p.m.

Too late! Ann Arbor is overgrown. It us to be a nice college town but its becoming a major city and traffic sucks.

Nicholas Urfe

Wed, Apr 17, 2013 : 1:05 p.m.

Prediction: Distance Learning is going to make a lot of these buildings obsolete and they will fall into disrepair and become even greater eyesores. The University of Michigan has been slow to embrace the concept - just as they are late to the concept of encouraging entrepreneurship.

JimmyD

Wed, Apr 17, 2013 : 7:45 p.m.

N/U - don't be going all "disruptive techno" on good old UofM. But I'm with you. I can't predict when, but the changeover from brick & mortar to online will hit like the switch from cell phones to smartphones.

Ian

Wed, Apr 17, 2013 : 12:59 p.m.

EVERYONE PANIC

Gerry

Wed, Apr 17, 2013 : 12:46 p.m.

I do have to get a chuckle, however, when the same people who complain about downtown development destroying the city's character applaud suburban/rural development that destroys the countryside.

Brad

Wed, Apr 17, 2013 : 1:11 p.m.

We have a LOT of countryside here. Let them worry about their own development issues.

Gerry

Wed, Apr 17, 2013 : 12:45 p.m.

I would like to see more hotels downtown. That is the one thing that A2 lacks, and it have a ripple effect by bringing in more customers to area bars and restaurants.

Nicholas Urfe

Wed, Apr 17, 2013 : 1:07 p.m.

Yes - let's make Ann Arbor more like other cities. More high rises, more hotels, more strip malls. More concrete. Let's convert some parks to parking lots. With some effort, we can be the next Troy or Livonia.

Kyle Mattson

Wed, Apr 17, 2013 : 12:51 p.m.

Hey Gerry, I attended the David Sedaris talk at Hill this past weekend and the first words out of his mouth were "Ann Arbor needs a really nice downtown hotel". So I guess you're not alone...

GratefulReb

Wed, Apr 17, 2013 : 12:30 p.m.

I'm far more worried about the condition of our roads and blight. Please do something about north main street.

Jeffersonian

Wed, Apr 17, 2013 : 12:03 p.m.

Why does one get a sense that this is a debate between progressives and the "lock the door, I've got mine" people. The city is changing in ways that are well thought. Freedom is letting people who want to pump millions of dollars into the local economy do so with proper review. Freedom is less historical district dictate and more "we'll offer you a tax break if you register your house as a historical item"- then budgeting for a few brass monuments and a couple hundred dollars off taxes for maintenance of historically significant architecture. Freedom is having interested people appeal to like minded fellows to fund art and social programs rather than taxing all those who are too busy working hard to resist vested interest's pet projects.

easy123

Wed, Apr 17, 2013 : 3:44 p.m.

Freedom is leveraging the govt. to cover the costs while developer has minimal risk - lol. A2 will be left hoiding the bag - remember the YMCA

Greg

Wed, Apr 17, 2013 : 10:59 a.m.

Two things are a problem currently and getting worse: Parking and Trafic. Ann Arbor needs to get its stop lights timed so the flow of trafic isn't stagnating at a minimum and not let any further development go thru until the parking situation is improved.

JimmyD

Wed, Apr 17, 2013 : 7:48 p.m.

Greg - where is the parking bad? And where is the traffic bad (other than Main or Washtenaw)? Just curious. .

John Q

Wed, Apr 17, 2013 : 4:24 p.m.

There's plenty of parking in Ann Arbor.

Colorado Sun

Wed, Apr 17, 2013 : 6:33 a.m.

Think of all the great organizations such as Ask Voters First that valiantly tried to stem development. Remember the heroes and heroines such as Ethel Potts, Glenn Thompson, Karen Sidney, David Cahill, John Floyd, and Mike Anglin who have fought against development in Ann Arbor. Win or lose, these were the citizens that fought an uphill struggle against developers and their powerful political connections in local government to help Ann Arbor retain its small town character.

Veracity

Wed, Apr 17, 2013 : 7:06 p.m.

Why do you write as if all these people have died and been buried for years? I am familiar with all of those mentioned and am delighted to report that they are still fighting to retain Ann Arbor's ideals and character. It is difficult to thwart developers when all they have to do is comply with zoning laws and find financing which is plentiful and indiscriminate.

justcurious

Wed, Apr 17, 2013 : 3:04 a.m.

I think what made Ann Arbor "cool" in decades past has changed as new younger generations "take over". The character I loved in my twenties is not what they love now. That is only natural and has been going on since the U of M decided to make Ann Arbor their home. Back in the early 60's my aunt sold the ancestral home with a full acre on Hill St. to a developer who built an apartment building for students. It's a generational thing I guess. We vowed to never "sell out" and some of us didn't. But some of us did and they are the developers we see now. There is still a population of people here who have the old values but Ann Arbor itself is fast becoming the home to a more hip urban "let's make money" crowd. My big regret is that the more people they attract the worse the infrastructure becomes. The bells and whistles are nice but not when you see dirty, pothole ridden streets and un-mown weeds everywhere. The infrastructure should come first, not the other way around.

easy123

Wed, Apr 17, 2013 : 3:43 p.m.

You nailed it right! Even Dexter seems too big!

EyeHeartA2

Wed, Apr 17, 2013 : 2:14 a.m.

Remember when all the Lefties wanted rent control?

rm1

Wed, Apr 17, 2013 : 2:10 a.m.

The developers putting up these buildings expect a return on their capital. If they get it. fine. In any event the buildings pay taxes. But if they build too many apartments, the rental prices will go down. That will benefit renters (not eternally all students -- as noted, there's no reason non-students can't rent). If there is a market, some buildings, or some floors, can be for non-students, with reconfiguration of room layout if needed. (And I don't believe the silly mantra about them all being 6-bedroom units.) And rental competition will surely lead to upgrades of downmarket student apartments, and to purchases of homes at attractive prices by locals, as some here note has already happened. If a developer projected and financed unwisely, so that foreclosure follows, we will still have the building, in the hands of a purchaser in foreclosure with a lower cost structure, and even more attractive rents. So why the whining? (Just habit?)

rm1

Wed, Apr 17, 2013 : 7:35 p.m.

Veracity notes: "the only other loser is the City of Ann Arbor that receives proportionally less TIF payments due to reduced valuation of the building." That's true, but the payments on the larger building are still considerably larger than the City would have received if the building had not replaced less valuable structures.

Veracity

Wed, Apr 17, 2013 : 6:58 p.m.

Your scenario happened most recently with Ashley-Terrace. After being bought out of bankruptcy for 30 cent-on-the-dollar the new owner was able to reduce rental rates to a competitive level which resulted in full occupancy and profit. Besides the original financing entities, the only other loser is the City of Ann Arbor that receives proportionally less TIF payments due to reduced valuation of the building.

Peter Baker

Wed, Apr 17, 2013 : 2:54 a.m.

Hear hear.

Dirty Mouth

Wed, Apr 17, 2013 : 1:41 a.m.

Here is the bottom line: Now, just like back in the 80s, this area was hit with a pretty substantial recession due to high unemployment (crash of the auto industry) and record low interest rates, resulting with very few options for municipalities like Ann Arbor to make any money due to a shrinking tax base and the University of Michigan expanding ever more rapidly diminishing taxable properties. And now, just like then, the city reacts by undertaking massive building projects like the high rise buildings in downtown and new parking structures. Yes, we should be worried. We should ask ourselves and our city's leaders to question the sustainability of this current building boom. Are we, in affect, setting ourselves for failure, e.g. real estate bubble and diminishing property values? What about supply and demand? As of yet, nobody has released any documentation justifying all of this building. Is the need really that great? Is it really true that what students want now is $1600 a month apartments with marble countertops and stainless steel appliances? and views of the city? I'm sorry, but I think we're being hosed by developers and the city and, yes, we should be worried!

easy123

Wed, Apr 17, 2013 : 3:41 p.m.

Jeffersonian- These are student housings. No a permanent staying folks- they would want to leave Michigan as fast as possible!

Stupid Hick

Wed, Apr 17, 2013 : 3:32 p.m.

Jeffersonian might not remember the fallout of failed developments in the 80s that Dirty Mouth refers to. Remember the open pit on Main Street near William? And it stayed like that for a decade, maybe longer. About the most recent recession: what about the current state of the site at Maiden Lane and Plymouth? You know, there used to be viable businesses there.

Jeffersonian

Wed, Apr 17, 2013 : 12:07 p.m.

Two things wrong with your thinking. 1. Far more people want to live in Ann Arbor than can find housing anywhere near the city. 2. Developers are spending millions in building expensive property- nobody does that without assuming massive risk. It seems that in a building bust they get hosed- not you.

Veracity

Wed, Apr 17, 2013 : 2:15 a.m.

Yep! In the end the developer may be the only winner as he always collects his fee first before construction starts.

BHarding

Wed, Apr 17, 2013 : 1:12 a.m.

My hope is that we can retain the warmth of Ann Arbor, so that we don't turn into a look-alike of every other city, our older houses downtown can be saved and treasured for the jewels they are. I know some people would just tear them all down...........I wonder what those people think of Charleston, South Carolina, or Annapolis, MD.? We have to be careful to grow thoughtfully. I agree with another poster that we need fair priced apartments or condos near downtown, for average working people or retirees rather than more student housing.

JRW

Wed, Apr 17, 2013 : 1:43 a.m.

"I agree with another poster that we need fair priced apartments or condos near downtown, for average working people or retirees rather than more student housing." Totally agree with BHarding. However, the developers want the big profits that come with luxury warehouses for rich students, not fairly priced apartments and condos for average working folks and retirees. No profit in that. It's all about greed.

JRW

Wed, Apr 17, 2013 : 1:11 a.m.

The market for high end student warehouses is already oversaturated, not in danger of BECOMING oversaturated. These monster high rises have no place in a city with downtown historic neighborhoods, overwhelming surrounding houses, flooding neighborhoods with cars and creating congestion and noise. If they had been scaled appropriately for the existing architecture and neighborhoods, they might have been seen as an asset rather than a liability. But no, the out of town developers have fatter wallets and the quality of life in AA is permanently degraded.

Chase Ingersoll

Wed, Apr 17, 2013 : 12:52 a.m.

Developers are notorious for optimistic numbers based upon models that don't reflect what is currently under construction or the other developers might be planning to build in the same area. Note this case for Ashley (Terrace?) But the market being the wonderful mechanism that it is, Ashley went through a (14 million ?) repo-sale ? I'm not aware that any public money was lost other than a dip in sale prices for downtown condos - but that is the market and history of the great places to be, including places like Florida.

Veracity

Wed, Apr 17, 2013 : 2:11 a.m.

Ashley-Terrace was built with $20 million borrowed from Bank of American and the LaSalle Group in Chicago. It was sold out of bankruptcy for $6 million. Because the building was bought so cheaply the new owner was able to reduce rental rates to be competitive with other rental units downtown and thus has achieved full occupancy and a profit. A number of recently built student residences have four to six tiny bedrooms off a shared common space which includes a kitchen and dining area. Because of the unique design of the apartments the buildings will not be easy to adapt to any other type of rental units if the building does not succeed as a student residence.

Chase Ingersoll

Wed, Apr 17, 2013 : 12:44 a.m.

Other cities are dying for this development and are throwing themselves and tax financing to any developer that will give them the time of day. That Ann Arbor does not have to do that, is a wonderful thing about Ann Arbor. A friend, resident and restorer of older neighborhoods, architect and city council member of a town the size of Ann Arbor, without the major University sitting on top of downtown pointed out to me that the large buildings that increase population density are the most efficient and environmentally friendly way of housing people and actually de-stress the older single family neighborhoods, like the ones in which he lived and restored homes. As a council person he pointed out the HUGE benefit to municipal budgets when a brand new, up to code building, with sprinklers, underground parking, on-site management and 1% income earners who could pay the taxes on units with $250k asessments, replaced an industrial, commercial or old multi-unit residential set of properties that had only a fraction of the total assessed value. Perhaps this is more about people not being able to control their own impending death, so they try and extend the life of property that has seen its best years and best use and now needs to make way for a new generation of buildings and younger people. And whomever would compare Ann Arbor to Southfield........I doubt they have been to Southfield in the last decade.

Esch Park

Wed, Apr 17, 2013 : 12:44 a.m.

If I was the lender for Packard Square and/or for Dan Keatler's development on the former Fox Tent site on Main Street, I would run for the hills. While I welcome the increased development and density downtown, this current surge in not sustainable. I am convinced. one or more of these proposed developments will end in foreclosure or, worse, shuttered.

Veracity

Wed, Apr 17, 2013 : 6:46 p.m.

easy123- I believe that you are referring to 101 S. Fourth Street at the Southwest corner of Fourth Street and Huron. I believe the senior citizens' home started as a Sheraton more than 30 years ago and provides an advanced look at would likely have happened if Valiant Partners were allowed to build their luxury hotel above the library's subterranean parking structure.

easy123

Wed, Apr 17, 2013 : 3:38 p.m.

Case in point is the monstrosity of a hotel , which has now been converted to a senior housing right of main street and Huron, I think. Completely unsuited for A2. Remiinds me of the last dinosaour the old YMCA. Guess who ended up holding the bag!

Brad

Wed, Apr 17, 2013 : 1:08 p.m.

I wouldn't lump those Packard Square clowns in with anybody else. They are in their own "class" when it comes to bringing down a neighborhood.

Veracity

Wed, Apr 17, 2013 : 12:40 a.m.

DEVELOPERS NOT AT RISK Z-man is wrong when he states "apparently developers perceive a need in the city for additional housing units, so they are willing to put their capital at risk to fulfill that need.." Developers use borrowed money from banks and investment groups to finance construction. The only risk that the developer takes is the risk of not getting site plans approved by the Planning Commission and then by City Council. Furthermore, the developer takes his fee of one-percent or two-percent of the financing before construction even starts. The developers LLC status protects him from personal loss if his project fails. The developers win-only situation is why proposed projects are not based on community needs or even the likelihood for financial success. Unfortunately, banks and investment groups often do not show good judgement in financing projects but then that could reflect the developer's prowess in selling his "snake oil."

Veracity

Wed, Apr 17, 2013 : 6:41 p.m.

The first paragraph above in my comment explains why continued explanation is required. As long as readers express belief that developers will never push a project that is likely to fail, I will continue my efforts to educate them otherwise.

timjbd

Wed, Apr 17, 2013 : 12:07 p.m.

Why does this need to be explained every single time?

Tim Hornton

Wed, Apr 17, 2013 : 12:35 a.m.

If Ypsi didn't have so much crime then some of the expansion could go there.

talker

Wed, Apr 17, 2013 : 12:23 a.m.

The cost of any development should be borne by the developers with no promises of tax abatements or anything else that costs Ann Arbor taxpayers anything. Also, nobody who promotes a development should receive any money or have any job connected with any development, including realtors who may get commissions from selling or renting units. Also, some developers are looking for help from the city that cushions their own risk and is likely to lead to excess development. One example of a failed development is Talley Hall.

tomnspats

Wed, Apr 17, 2013 : 12:50 a.m.

`as there is a set number of students there is already an over supply of student housing . The interesting part is yet to come. When the supply of students has shifted to the high rises what will become of the student ghetto? Will it become a real ghetto ? The landlords will not let these buildings sit empty. of

sttc

Wed, Apr 17, 2013 : 12:18 a.m.

worried? we should be glad. the ann arbor area is one of the few in michigan that is actually showing any kind of positive economic growth so one would expect development to follow. personally, i think it's amazing. where else in michigan are you going to see four, five high-rises going up concurrently? makes me feel like i'm living somewhere vibrant that's on the up-and-up, instead of a forgotten rust belt backwater. if you want small town living, believe me, there are plenty of places in the state of michigan that are un(der)developed and will remain so likely forever. if you don't like big city living, give brighton, saline, dexter, milan, belleville, et al a shot.

sellers

Wed, Apr 17, 2013 : 1:36 a.m.

Good point. The challenge is people want a strong employment center, and a small town. That is rare if not extinct in the USA. We probably have one of the smallest populations for a successful (stable) city economy nationwide. The likes of Madison, Columbus, Colorado Springs, Austin, Lincoln, are all larger. Midland and Cambridge are on par.

Tom Joad

Wed, Apr 17, 2013 : 12:09 a.m.

Traffic considerations ought to be factored into future growth. Potentially we could reach a point where rush hour traffic becomes stop and go and thousands of cars spewing out exhaust while sitting idle doesn't do the air quality any good. Walk around any Friday or Saturday evening and the traffic congestion is choking the streets with many people looking for parking, or attempting to parallel park on streets while others pile up behind them waiting. Downtown Ann Arbor was originally constructed when traffic was negligible. Its historic growth patterns has been commensurate with increased traffic and the providing of expensive parking structures.

Mr. Me

Wed, Apr 17, 2013 : 2:13 a.m.

The problem with parking on weekend nights is not the city planning, it's that they stop metering the street parking after 6 PM and everybody circles for a free spot instead of going into the garage.

BlueEyesGirl

Wed, Apr 17, 2013 : 12:02 a.m.

Am I the only one that read that as BAZINGA!

YpsiGreen

Tue, Apr 16, 2013 : 10:49 p.m.

Different question: Is the fire department sufficiently trained to fight high rise fires?

Brad

Wed, Apr 17, 2013 : 12:40 p.m.

@SLR - how many floors is it good for?

Stephen Lange Ranzini

Wed, Apr 17, 2013 : 4:08 a.m.

@JRW: As of about a month ago when it finally took delivery of the new tower truck, the answer is yes.

JRW

Wed, Apr 17, 2013 : 1:16 a.m.

Does it have the necessary equipment to reach high rises?

craig stolefield

Tue, Apr 16, 2013 : 10:16 p.m.

Isn't 60% of downtown in a historic district so not much will ever change? There are some new taller buildings but all the old ones will still be there in a 100 years when these are torn down and something else goes up. Change is good, the populace downtown was starting to look pretty grey just a few years ago. I like the idea of letting the town grow up while saving some farm land out side the city.

Ian

Wed, Apr 17, 2013 : 1:01 p.m.

Take your logic elsewhere

a2miguy

Tue, Apr 16, 2013 : 10:08 p.m.

"...and also will jeopardize the existing architecture of the city that gives Ann Arbor the small town feel that it once had before the university grew to its current size" As if this is news to anyone who's been paying attention for the last decade or so.

Luisa pomeranian

Wed, Apr 17, 2013 : 5:12 a.m.

Try five decades or so.

DannnyA

Tue, Apr 16, 2013 : 9:59 p.m.

Flash! Things change. Get used to it.

Roger Kuhlman

Tue, Apr 16, 2013 : 9:32 p.m.

Ann Arbor and Washtenaw County does not need more people and development. We have enough as is if we are concerned about preserving and promoting the natural environment in our county, I don't think making a ton of money for developers should be what Ann Arbor and rest of Washtenaw County is all about.

Chase Ingersoll

Wed, Apr 17, 2013 : 12:47 a.m.

Roger, what you are saying is just bigotry against new people cloaked in a love of nature. There is nothing more natural and important than people. Try loving them and supporting their rights to live where they can afford and chose rather than having achieved yours, purporting a regulatory lockout.

ordmad

Tue, Apr 16, 2013 : 10:46 p.m.

The City is growing. That means more people and development (though I agree we need better zoning regulations to avoid the valley of towers feel). That Ann Arbor of yesteryear is gone. You'll need to get over it or move on -- there is no turning back.

BlueGopher

Tue, Apr 16, 2013 : 10:13 p.m.

I hardly call the area surrounding Landmark, ie a block off Huron rd. next to an automotive shop and accross the street from a vacant papa johns pizza a "natural environment".

mun

Tue, Apr 16, 2013 : 9:30 p.m.

Maybe this wil force property owners in the student ghetto to improve their properties.

Larry Ryan

Tue, Apr 16, 2013 : 9:27 p.m.

I welcome the taller buildings downtown. Not many years ago our neighborhood near campus was severely stressed with students moving in who, well, had a different lifestyle than the families who lived here to take advantage of good schools nearby and an easy walk to campus. Landlords were grabbing every house that came up for sale and stuffing it with students. Now there are non-students moving into some of those same houses. People out of school with jobs and there are even families buying former student houses and fixing them up. And no, they are not all 4,5, or 6 bedrooms. There are a lot of 1 and 2 bedrooms. I'm sure some non-students live there too. The downtown is looking a little younger these days and that's good to see.

Peter Baker

Wed, Apr 17, 2013 : 12:40 a.m.

This is exactly the trend I'm noticing too, and is hugely welcome. There are beautiful neighborhoods near the center of the city, why not free some of them up by moving the temporary residents in to better versions of dorms, and attract more post-university young people, who only want to live near down town?

Jonathan Blutarsky

Tue, Apr 16, 2013 : 9:32 p.m.

Well said - it is nice to see some of the student slums being bought by young couples and rehabbed back to single family abodes.

BlueGopher

Tue, Apr 16, 2013 : 8:57 p.m.

As a current student of the University and a current renter whose lived in a few of the dumpy, over priced, under-code "slum-lord" college houses on and around campus I think that these developments (such as Landmark) are a step in the right direction for Ann Arbor since they offer safe, quality housing for graduate and undergraduate students. Ann Arbor college housing has desperately needed improvement for quite some time now - the carpet, paint, kitchen appliances of most rentals have not changed nor been improved since even the time when my parents attended this University. I hear many people complaining about these high-rises in this forum compromising Ann Arbor's quaint, "towny" feel, but I don't hear anyone complaining about the 711 or the CVS on State St. The only people I could possibly think would be opposed to these residence buildings would be Ann Arbor landlords, or individuals involved in Ann Arbor college housing real estate as this may only detract from their business

Burr Oak

Wed, Apr 17, 2013 : 10:35 p.m.

The University practiced benign neglect on the Frieze Building, and now it is gone. The Pewabic tiles in the School of Education are doomed. The Corner House, as well, and now it is gone. Of course, the University is what makes us vibrant and provides much of our cultural identity. That is different than having the housing needs of students dictate or culture. The new buildings are ugly and the scale of town is changing in ways that we can never repair. On another note, our public universities used to be places where diversity was experienced directly through shared living in the dorms. Now, wealthy students are living in fine apartments and are much less likely to get to know fellow students from different social and economic backgrounds. It is a real shame.

johnnya2

Tue, Apr 16, 2013 : 11:43 p.m.

"The University seems to have a policy of allowing buildings to lapse out of maintenance " EVIDENCE or it is not happening. Name one piece of property the U owns that they have allowed to go into disrepair.. Of course I could drive down Main Street and every house before Summit looks as bad as any house n Detroit that has not been maintained by the owners.But you go ahead and blame the U for everything.

BlueGopher

Tue, Apr 16, 2013 : 11:32 p.m.

"Ann Arbor is a university town, but we do not need to adapt our culture to meet the fleeting preferences of students.." - I think you said it best. Ann Arbor is a university town. I cannot even begin to try to define the "culture" of Ann Arbor. All I can say is that I love it - And and an integral, necessary component of Ann Arbor's unique culture has to do with the University - and the students. Who unfortunately need places to live. " The new buildings are unattractive and will not age well." - Really? Is there any data to support this? I am unaware of any. In my opinion, many of these new high rises remind me of the contemporary stone architecture of Ross business school. And well, I guess beauty is in the eye of the beholder. Ill just say that Ann Arbor is, and will always be a beautiful city. When I walk downtown I'm not really thinking about the facades of the buildings, but the memories I've had downtown on football Saturdays with my family, or my first week of classes when I made some of my closest friends. "Too many older homes which could have been fixed up are gone.." - And I'm sure college students lived in each and every one of them until they were condemned. And then, when it was the owner's job to do "the right thing" and restore the buildings they didn't. "Why should out of town developers destroy our cultural heritage?" - Can you elaborate further? I really don't understand what you mean by this. Students significantly contribute and sustain the downtown small business economy. Why do you think resturants and take out resturants close earlier in the summer when students aren't here?

Burr Oak

Tue, Apr 16, 2013 : 10:55 p.m.

Ann Arbor is a university town, but we do not need to adapt our culture to meet the fleeting preferences of students who are here for a year or two. The new buildings are unattractive and will not age well. Too many older homes which could have been fixed up are gone. The University seems to have a policy of allowing buildings to lapse out of maintenance so they can justify demolishing them. I don't remember anyone asking the permanent citizens of Ann Arbor if we wanted to become a big city. That is not why we are here. Many of us have moved back here after urban lives because we prefer what we left. Why should out of town developers destroy our cultural heritage?

BlueGopher

Tue, Apr 16, 2013 : 10:49 p.m.

Apologies I wasn't reading every news article or tweet concerning the installment of the State St. CVS or 711 on this website - I was too busy finally purchasing shaving cream and tooth paste at affordable prices while not having to borrow a friends car or ride a bus 10 minutes to the nearest meijer outside of town. I though this article was about "development", does that not include local businesses as well, or are those exempt oh great conversation dictator?

a2miguy

Tue, Apr 16, 2013 : 10:10 p.m.

"I don't hear anyone complaining about the 711 or the CVS on State St." Either you weren't here when those stores were announced, or you weren't paying attention.

A2anon

Tue, Apr 16, 2013 : 8:50 p.m.

The biggest problem with these enormous developments is that they are for students, and students only. Who else would live in a 6-bedroom apartment? So when the student market becomes saturated, then what do we do with them??? We need more downtown housing for non-students, that live and work here full-time. Student housing has crept off-campus into downtown far too much, and our downtown risks turning into one big Bongs-n-Thongs Chain Pizza Joint Campus Nightmare.

ccb9

Wed, Apr 17, 2013 : 4:49 p.m.

I completely agree, not everyone who lives downtown is a student. If they want to expand student housing they should do it closer to central or north campus, or around the South U area. The great thing about the Main St area is that most students don't usually go all the way there. Why not build housing for all of us who aren't students but work and live here?

Kyle Mattson

Tue, Apr 16, 2013 : 9:18 p.m.

Good question A2anon- I wonder if some consideration for repurposing the structures in the future was given in the design of some of these developments. I'll admit it is probably unlikely, but who knows I could see a 6-bedroom quickly becoming a 2 or 3 bed with larger living space with a couple swings of the sledgehammer.

David Cahill

Tue, Apr 16, 2013 : 8:21 p.m.

Ann Arbor was overdeveloped a decade ago. Thankfully, a lot of the unusually stupid projects approved by Council (e.g., Broadway Village) since then fell apart by all by themselves. But we will still suffer the student warehouses, City Place, and the courts/police facility for decades to come.

what4

Tue, Apr 16, 2013 : 8:14 p.m.

Our near worthless elected officials could add wording to our zoning ordinances prohibiting people from building in a way that shades other properties, denying the owners solar access, the reasoning being that when that is done you are taking away a valuable resource- their ability to use solar energy for electrical generation , water and home heating and raising winter heating costs. At minimum the offending property owner would have to compensate the others. Perhaps pay those property owners an annual fee in perpetuity, or until the structure is removed.

johnnya2

Tue, Apr 16, 2013 : 11:38 p.m.

And unless you can PROVE that the building does that, you are out of gas. You can not show ONE building that has not been able to produce solar energy do to building. Oh, and what would you do when a tree grows? Chop it down because it may cause shade?

Roger Kuhlman

Tue, Apr 16, 2013 : 9:35 p.m.

Tell me when are you going to shell out the big bucks to install solar technology on your property. Solar energy is EXPENSIVE.

Vivienne Armentrout

Tue, Apr 16, 2013 : 8:09 p.m.

Thanks for covering this report. It raises an issue many of us have been concerned about for some time - what will happen to these structures after the bubble pops, and what effect it will have on our quality of life. The report itself has an amusing error. It reports that the Council turned down the Valiant proposal for a hotel and conference center "earlier this month". (That was so, so 2011.)

Laurie Longo

Tue, Apr 16, 2013 : 7:56 p.m.

It sometimes seems that there is a fundamental contradiction between the various policies in effect for our community: the greenbelt policy seeks to contain development to the inside of the city while the historical preservation policy seeks to prohibit the same thing. Can we really have it both ways?

John Q

Wed, Apr 17, 2013 : 3:17 a.m.

"Can we really have it both ways?" Why not?

Roger Kuhlman

Tue, Apr 16, 2013 : 9:37 p.m.

Why would we want more development anyplace?

John of Saline

Tue, Apr 16, 2013 : 8:58 p.m.

Depends how much people would put up with living underground.

Ypsi Russell

Tue, Apr 16, 2013 : 7:52 p.m.

Avalon thinks too small... these developments will ultimately be the solution to the homeless problem.

Judith H

Tue, Apr 16, 2013 : 7:48 p.m.

I believe most people like Ann Arbor because of it's small town feel, which it has maintained until recently. If I had wanted to live in Southfield, I wouldn't have moved here. And all these tall buildings are starting to look like Southfield to me. I also feel badly for the neighbors who live next to these new buildings. City Council needs to reevaluate the wants and needs of the people who live here.

easy123

Wed, Apr 17, 2013 : 3:23 p.m.

Dave Kozol That is exactly what is happening to Ann Arbor. A2 is becoming less and less a town that one wanted to come live in 20-30 years ago. The lack of caring of some a2 residents have and the way they drive around - leads you to believe that these narscissists are now setting up brood here.

yohan

Wed, Apr 17, 2013 : 2:36 a.m.

Dave said "Southfield is tall buildings with parking all around them." And Ann Arbor is becoming tall buildings with NO parking around them

Michigan Man

Wed, Apr 17, 2013 : 1:20 a.m.

Please don't crap on Southfield - I like Southfield! Great place and smoking hot girls!

Dave Koziol

Tue, Apr 16, 2013 : 9:32 p.m.

I don't think we have any risk of becoming Southfield. Southfield is tall buildings with parking all around them. That's not what's happening in Ann Arbor...

Jaime

Tue, Apr 16, 2013 : 7:23 p.m.

A lot of this depends upon whether enrollments continue to rise at the U of M as all of these apartments are targeted at students. It also forces landlords of some of the existing properties to make improvements. I feel sorry for any non student residents who have to live in the shadow of these tall buildings. I think there were some serious mistakes the last time the city looked at rezoning. There should have been more of a buffer between the tall building and neighborhoods. Don't forget that the wonderful mayor of Ann Arbor has been pushing for high density living for a long time. While this kind of density has long been a norm in large cities, it may not fit well with our conception of Ann Arbor.

Momentum

Tue, Apr 16, 2013 : 7:21 p.m.

Absolutely we should worry - we will be a ghost town soon those complexes can and wont; be filled in the long run - but by than the character of the city is destroyed Out city council did not do the city a favor when they allowed those developments - this needs to stop ASAP

easy123

Wed, Apr 17, 2013 : 3:19 p.m.

non-Pc there is NO uch thing as supply and demand here, as the case study of 2008 crash proved. We have an overabundaunce og housing. Maybe not the perrfect kind of housing. The govt. interference created an artifical demand. We are in that trejectory now. Also, there is a quality of life issue. If you wish to build - go to detroit

Jeffersonian

Wed, Apr 17, 2013 : 12:13 p.m.

Yohan-- listen-- don't invest in the banks or financiers who are merely wasting their money. There sure must be a lot of suckers out there who are ready to line the developer's pocket$ so don't let that be you.

John Q

Wed, Apr 17, 2013 : 3:17 a.m.

"You guys obviously don't get the Law of Supply and Demand. Once again, Developers won't put their own money at risk unless there is a reasonably good chance for good return on their investment." Amazing that you managed to sleep through the last bubble in the residential and commercial markets to believe such nonsense.

yohan

Wed, Apr 17, 2013 : 2:33 a.m.

z and PC you obviously don't understand how developers really work. They do not put up their own money. They are using money from banks and other investors. The developers collect their fees and within a year or two after completion they are gone and could care less what happens to the building in the long term. And no these apartments are not suitable for families. They are designed for students with mulitiple bedrooms and ONE common room / kitchen.

Z-man

Tue, Apr 16, 2013 : 9:31 p.m.

I agree with NoPC. Also, such apartment buildings may target students, but they are also open to individuals, including employees of the UM, UM Hospital, and other businesses as well, who may decide to move into Ann Arbor rather than commute from beyond our greenbelt. Now if we could just implement a city income tax to tap into the growing UM who keep accumulating formerly private property that comprised our tax base. The income could offset the ridiculously high tax rates we pay in Ann Arbor.

NoPC

Tue, Apr 16, 2013 : 9:03 p.m.

You guys obviously don't get the Law of Supply and Demand. Once again, Developers won't put their own money at risk unless there is a reasonably good chance for good return on their investment. Frankly, it's a good selling tool for the University to attract more out-of-state students paying higher tuition. Demand is very high for this type of housing and will continue to be so for a longtime. With the cost of higher education, fewer and fewer kids will be attending the University (and not filling the dorms). Kids from well-to-do families tend not to live in the dorms and seek luxury student housing. This is a smart investment on the part of the developers and a great source of tax revenue for the city. After all, don't liberals love more tax revenue???

Elaine F. Owsley

Tue, Apr 16, 2013 : 7:16 p.m.

Would it be better to follow the hysterical district commission's plan and let the city remain a collection of old, crumbling homes? In the midst of a growth most cities would envy, why look for the worst scenario? Oh, Oh, the city is growing!! Oh, Oh, the university if growing! Good grief!!!

easy123

Wed, Apr 17, 2013 : 3:16 p.m.

There is city called detroit that you can rebuild. The infrastructure of A2 cannot/should not handle unbounded growth.

Nicholas Urfe

Wed, Apr 17, 2013 : 1:02 p.m.

If you'd like to make Ann Arbor like those other cities, maybe you should instead move there. Most of us like the fact that A2 is not other cities.

timjbd

Wed, Apr 17, 2013 : 12:02 p.m.

Yes, one extreme or the other. Nothing can happen in between. Allow developers to build without limits or remain stuck in the 60's.

Bob W

Tue, Apr 16, 2013 : 7:13 p.m.

The fact that the question is being asked suggests it is worthy of keeping an eye on it at the very least.

Steve Bean

Wed, Apr 17, 2013 : 12:53 p.m.

The thing to really be aware of (don't worry—that's not helpful) is if you are invested in a REIT. While they may continue to pay an attractive dividend in the near term, the value of the shares will begin dropping later this year. If you don't pay attention, you could lose a big chunk of principal. And that drop will be essentially permanent. They won't be coming back up to anywhere near the current level for decades.

Steve Bean

Tue, Apr 16, 2013 : 8:59 p.m.

It's also the type of question posed at a peak. The boom is over. Large-scale construction will tail off from here, following the drop in the stock market over the coming several years.

DJBudSonic

Tue, Apr 16, 2013 : 7:04 p.m.

YES, we should be worried. It is not the university that has grown too large, it is the greed of the developers, and the apparent ease with which any project designed to maximize floor space for profit is allowed.

Nicholas Urfe

Wed, Apr 17, 2013 : 1 p.m.

Definition of GREED : a selfish and excessive desire for more of something (as money) than is needed

JRW

Wed, Apr 17, 2013 : 1:21 a.m.

It's all about greedy developers who don't live in AA, or anywhere near the city. It's also about TAX revenue for the city, which trumps everything else in allowing these monstrosities.

djacks24

Tue, Apr 16, 2013 : 8:55 p.m.

I disagree. The University has grown too large. It's currently bloated and inhaling all of the tax base that could be available for other businesses that would not be exempt from property taxes. Also, it uses (directly and indirectly) Ann Arbors resources we tax payers fund for free basically.

Z-man

Tue, Apr 16, 2013 : 7:47 p.m.

Apparently developers perceive a need in the city for additional housing units, so they are willing to put their capital at risk to fulfill that need, in exchange for which they expect a return on their investment. So why is it that you characterize this as excessive greed on the part of the developers?