Ann Arbor officials say they're making progress in negotiations with the developer of City Place apartments and hopeful they can avoid demolition of seven houses along Fifth Avenue.

City Council Member Carsten Hohnke, who has been in talks with developer Jeff Helminski, expressed his growing confidence earlier this week that a solution could be found to stop City Place and maintain the character of the streetscape.

Wendy Rampson, the city's planning manager, also offered an update on the negotiations between the city and the developer at a Planning Commission meeting Tuesday.

Hohnke, D-5th Ward, has been leading the charge to bring back an alternate development proposal, known as Heritage Row, for reconsideration. A majority of council members previously voted in favor of Heritage Row — which promised to preserve the seven houses that City Place would knock down — but the project still fell one vote short of approval.

Developer Alex de Parry recently handed control of the property over to Helminski, who has been preparing to move forward with the approved by-right project known as City Place, an outcome neighborhood residents and city officials don't want to see happen.

Helminski believes the Heritage Row project, as proposed by de Parry last year, isn't economically viable, and so he's been in talks with the city about revising it. Most notably he proposes cutting back on affordable housing and historic preservation elements, as well as eliminating geothermal and underground parking features.

Rampson said Helminski and his team are still working out costs to see what it will take to move Heritage Row forward.

"In order to proceed with that type of project, he needs to have increased density and some other changes to the project," she said.

Helminski could not be reached for comment.

Heritage Row is a planned unit development, which calls for a deviation from existing zoning and thus requires a promise of public benefits in exchange. Rampson said the city's staff is trying to determine from previous City Council and Planning Commission discussions which public benefits outlined in the Heritage Row proposal are considered most valuable.

"And then (they need) to see if this proposal still has that, or whether it changes enough significantly that the public benefit doesn't meet that threshold," she said. "So that's where we're at."

DDA Executive Director Susan Pollay has been in conversations with the developer about a possible arrangement where, instead of the developer providing underground parking on site, the DDA would provide permits to allow Heritage Row tenants to park downtown.

The project site is one block south of where the DDA is building a 700-space underground parking structure on what's commonly referred to as the Library Lot.

"In talking with the DDA, there is an interest in certainly providing parking permits, but not reserving them at the Library Lot, because we only have so many that are going to be available for a potential development on top of the Library Lot," Rampson said. "So the idea was to talk about being flexible within the number of structures within the distance of this site."

As the city's staff continues to work out a deal with Helminski, officials say time is of the essence since the developer is anxious to move ahead with City Place. The City Council is expected to consider a revised version of Heritage Row at its next meeting on Monday. If approved then, the project could come back for final consideration on Oct. 24.

"We're trying to pull all of these things together basically in the next two weeks," Rampson told planning commissioners Tuesday night.

While de Parry previously promised to rehabilitate the seven houses in keeping with federal guidelines for historic preservation, known as Secretary of the Interior's standards, Helminski is asking for more leeway when it comes to what to do with the century-old houses.

Rampson said the developer has acknowledged he doesn't have a very good sense of the state of repair of all of the houses, and so he's asking to reserve the ability to do replacement of some parts or all parts of the houses if they're found to be deteriorated.

"When you last saw the PUD, it included Secretary of Interior standards, so he's proposing to remove that and keep the character of the buildings but not restore them in a historical fashion," Rampson told commissioners.

"He's proposing to retain seven houses in the same essential form, but I think if he finds one that's beyond repair, the proposal right now is to take it down and rebuild like," she said. "He's written it that it he could potentially rebuild the whole house or portions that had been deteriorated — replacement with modern materials, replacing windows that were deteriorated — so clearly not Secretary of Interior standard renovations for the buildings."

Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.