City of Ypsilanti, Stewart Beal reach deal on Thompson Block
The City of Ypsilanti and developer Stewart Beal have reached a deal on how to proceed with initial renovations on the Thompson Block building, the first sign of real progress since legal maneuvering began four months ago.
Per the agreement, all exterior walls will be stabilized, all shoring will be removed from the Cross and River street right-of-ways, and the windows and doors will be secured and boarded up within one year.
Crews commenced work again on the Thompson Block recently.
Washtenaw County Circuit Court Judge Donald Shelton ordered the full City Council and Beal into a facilitation session Monday. That move followed several months of facilitation between attorneys on both sides that failed to yield any progress.
The deal provides a “reasonable timeline for restoring the Thompson Block to the way it was before the fire,” said Beal, whose Historic Equities Fund 1 LLC owns the building. The building was under renovation last fall when it was severely damaged by an arson fire.
The agreement was signed by all the council members present, Beal and attorneys for both sides. Council Member Brian Robb was on vacation and did not attend.
The lawsuit filed by the city is expected to be dismissed by Sept. 13.
Per the new agreement, bracing propping up the west wall that was recently moved from River Street to the sidewalk will be completely removed from the right-of-way by Aug. 17, 2011. As previously agreed, all shoring will be removed from Cross Street by April 25, 2011.
“People will not know the fire occurred,” Beal said. “The façade will totally be reconstructed … behind the façade, there will still be the same problems that we are working on.”
The agreement gives Beal three years to complete the exterior envelope of the building, which Assistant City Attorney Karl Barr said includes a roof, stable walls and all openings sealed with at least temporary doors and windows. He said it essentially means the building will be “impervious to the elements” and removes its status as a nuisance.
The agreement also requires Beal to obtain $2 million in insurance within 10 days of signing the contract to protect the city. Within 30 days, the east section of the south wall, which an independent engineer recently deemed is in danger of sending masonry into Cross Street if it topples, will be stabilized. It currently doesn't have any support or bracing.
In early April, the City Council rejected a deal developed between Beal and City Manager Ed Koryzno that provided a shorter timeline to secure the building and make progress than the current agreement provides.
For example, it gave Beal six months to remove all shoring from the city’s right-of-way, which would have meant an Oct. 4 deadline. Beal now has a year to complete that task. He said litigation consumed most of the construction season, and the current timeline is reasonable.
The prior agreement also required Beal to hire an independent engineer to determine the structure’s stability, which the city recently did instead.
As with the current agreement, the April agreement called for Beal to provide $2 million in insurance to protect the city. It also required Beal to furnish a $60,000 performance bond in case the conditions weren't met.
The current agreement has no performance bond. Instead, failure to meet any of the conditions or timelines will put the two sides back in facilitation and possibly cause the lawsuit to be reinstated.
Mayor Paul Schreiber, who voted for the previous agreement, said he's satisfied with that protection for the city.
“Everybody’s goal is to see the Thompson Block renovated and restored, and after hearing the Beal team, that’s their goal,” he said. “This agreement will give them every chance to do that and provides the city some protection.”
The April agreement also called for renovations to begin within six months, with either Beal’s firm or another company. Beal said he has no immediate plans for renovations beyond stabilizing the building.
The largest issue has been funding. Beal said investors previously interested in the project backed away once litigation began, but said he now has a Sept. 18 meeting with the same group. He declined to name the group, but said they bring a tenant and are involved with several successful breweries in the area.
Beal has estimated a total renovation at $4 million. He has obtained $1.8 million in State Historic Preservation Office tax credits to rehabilitate the 148-year-old structure. Those credits are only provided upon completion of the project, so Beal must raise $4 million in capital.
Beal said he's optimistic over the direction of the effort.
“This is a victory for historic preservation, this is a victory for Thompson Block and this is a victory for the Beal Group because now we can get back to work and focus on the project that we always wanted to do,” he said.
Barr said a settlement, by its nature, isn't perfect for either side and requires compromise, but allows the issue to move forward.
“To reach a settlement, there is a little bit that’s ambiguous, but we move forward with the hopes and promises that things will happen,” he said.
In other Thompson Block developments, the man authorities believe set fire to the building last September will appear in court for a preliminary hearing today.
Tom Perkins is a freelance writer for AnnArbor.com. Reach the news at news@annarbor.com or 734-623-2530.
Comments
lefty48197
Sun, Nov 14, 2010 : 2:45 p.m.
As a construction professional, I hope that this property will be saved and restored. Restoring this building is not impossible, but it is much more difficult than constructing a new building. The newly restored building will have to be supported by a steel skeleton that takes some of the weight off of the exterior brick walls. Having a developer interested in managing the project is a great asset for Ypsi to have. The whiners and the nay-sayers can all pretend that they have all the answers, but clearly they don't have enough knowledge to make major decisions on this project. I salute those that are working to save this beautiful old building. I look forward to seeing it restored to it's former glory as the new rail lines brings scores of daily visitors to the depot town area that have never been there before. I hope that the local civic leaders have the brains to get out of the way and allow the private investors to do their job. Go Beal go! Make them all eat their words!
help_is_on_the_way
Thu, Sep 2, 2010 : 9:46 a.m.
This makes me sad. I love my city and want to see improvements but this building is an eyesore. It needs to go.
Depot Town
Thu, Sep 2, 2010 : 9:14 a.m.
ypsilantitaxpayer sounds like a member of the CDC who is trying to create division in the city. The cheap shots at the freight house are a dead giveaway. Bill? Jerry? Shame on you!
ypsilantitaxpayer
Wed, Sep 1, 2010 : 8:57 p.m.
After months of legal wrangling, the Thompson Block settlement comes far short than the initial agreement that was worked out between the City Manager and the developer. Councilmember Murdock lead the charge to reject this initial agreement and he should step up and admit it was a mistake. If this was just one incident where the council shot itself in the foot that would be one thing, but looking back there are more than a few impulsive, reactionary actions taken by this council and its time for them to get a grip on reality. It is particulary unsettling as a taxpayer to know that these decisions were not based on long range planning but politics. Citizens of Ypsilanti brace yourself for some more bad news. The high speed rail isn't coming to Ypsilanti anytime soon and the Freighthouse project is in big trouble due to mismanagement. After the Friends of the Freighthouse spent 3/4 of million dollars on the project, at the bare minimum the taxpayers should reasonably expect they would be able to complete the coffee shop that was promised but don't hold your breath...... this too isn't going to happen. Their business plan was based on pie in the sky assumptions and yet our city council and city manager never publically questioned it. If it were a local bank loaning the money to a business, you can bet the farm that the loan application would have been stopped until they presented something based on facts, not dreams. Listen carefully.... do you hear Councilmember Murdock's foot steps running away from this project even though he was the city council's liaison person and a member and leader of the Friends of the Freighthouse. Our community needs to start to hold our elected officals accountable for their actions and the time is now.
ShadowManager
Wed, Sep 1, 2010 : 1:17 p.m.
There's probably "substantial conflict of interest" in ALL matters related to Depottown development...or lack thereof, the City Council, and the Historic commission in Ypsilanti..everyone seems to be related to one another, have a history, or a blood feud, in Ypsi politics. It's one thing that A2...with its transitory university population and migration from the East Coast...lacks. One reason Ypsi politics can be, at times, more interesting, if infinitely more frustrating.
Skyler Coleman
Wed, Sep 1, 2010 : 9:06 a.m.
Additionally, didn't anyone look into Assistant City Attorney Karl Barr & Stewart Beal's friendship? I think there is a substantial conflict of interest regarding this matter.
Skyler Coleman
Wed, Sep 1, 2010 : 6:18 a.m.
After this long, this is all Ypsilanti and the City Attorney's office could agree to? What a joke. Assistant City Attorney Karl Barr couldn't get more than the infrastructure, but then again, that is his signature move: leave up the facade to fool every one around him. Maybe next time you can drag this out over 6 years and deplete more of Ypsilanti's resources fighting something that should be a no brainer.
Hypnotique
Wed, Sep 1, 2010 : 12:16 a.m.
Why are people who no longer live in Ypsilanti -- people who actually no longer live in Michigan -- commenting on this story?
ypsiRK
Tue, Aug 31, 2010 : 8:25 p.m.
I love how everyone complains from their couch about something that really isn't a problem compared to the crime and state of Ypsi schools. I live close to the Thompson Block and wish Beal the best of luck because he hopefully will make something positive out of a negative. Do you all really think it's going to literally look the way it was before the fire with boarded up windows and all? Negative people suck
T. Kinks
Tue, Aug 31, 2010 : 8 p.m.
Please, "The way it looked before the fire"? That building has been an eyesore my entire life. I can't believe the city is giving them 3 yrs just to do the outside. When can we expect the building to be completely finished 2020? Get some backbone Ypsilanti City Counsel, TEAR IT DOWN! Terry Heiss Carpentry
Jim H
Tue, Aug 31, 2010 : 5 p.m.
The building was a deteriorating heap when I moved here 36 years ago and it hasn't improved since. New signs, every year or so, promising renovation don't make it for me. The building should have been demolished decades ago. Everything old is not worth saving. Now we have a dangerous deteriorating partial heap - nice progress.
Steve Hendel
Tue, Aug 31, 2010 : 4:28 p.m.
@Ron: Why do you think Mr Beal has invested anything in this property, other than purchasing it for---I would guess---very little $$$? I would also guess, although I am not sure, that he has used insurance proceeds to pay for the shoring. I mean, he talks about raising the entire cost of renovation (as if there is anything there to renovate) from investors.
watchingypsi
Tue, Aug 31, 2010 : 4:20 p.m.
Ron, I do not feel like anyone should thank any person for buying buildings or opening businesses anywhere. It's a free market, a free country I don't thank the stockholders of Walgreens for opening a branch on Michigan avenue so why should I thank Stewart Beal? Why do so many of his fans portray him as some saint that should be looked up upon in wonder and gush about him spending money. Big Deal. And by the way, I think he got "The Thompson Block" for pennies on the dollar...
Steve Hendel
Tue, Aug 31, 2010 : 4:18 p.m.
I can't believe how much slack they are cutting Beal, who ( up until now, anyway) seems to be all talk and no action. BTW, has anybody noticed how much the wooden shoring resembles the clubhouse you nailed together every which way using scrap lumber when you were a kid?
ShadowManager
Tue, Aug 31, 2010 : 3:08 p.m.
I heard about the same time the Thompson building is fully-restored there will also be a fully-functional high speed railine operating out of the vacant railroad depot across the street, The Freighthouse roof will be fully-repaired and the venue hosting weddings and a vibrant nightlife, and...oh yeah, pigs will fly.
Cash
Tue, Aug 31, 2010 : 2:59 p.m.
Obviously the judge doesn't live in Depot Town. Nor does the mayor live in Depot Town. Too bad the mess can't be moved their front yards. I feel so badly for the folks who live near that monstrosity.
YPboyWRheart
Tue, Aug 31, 2010 : 2:46 p.m.
So sad. Ypsi lost on this one.
ron
Tue, Aug 31, 2010 : 2:11 p.m.
Having restored buildings in Ypsilanti and Ann Arbor, and having known Stewart Beal for several years, the Ypsilanti community should consider itself fortunate that Mr. Beal is willing to invest in this community. Time and again Mr. Beal has backed up his word with his money and invested in Ypsilanti. The restoration of that property will change the image of Depot Town. It will encourage people to visit this community. It will provide a great example of historic preservation (something this town prides itself on). Good for the City Council for working out a positive, successful outcome on what will become an asset to this town. And thank you Mr. Beal for investing your own money into one of Ypsilanti's worst eyesores and derelict properties.
Captain Magnificent
Tue, Aug 31, 2010 : 12:31 p.m.
It's unconsionable that fixing up a building would take so long. That whole construction season thing is a load of crap- @SonnyDog09 made a good point- Maple Leaf Gardens was constructed in 6 months- are you telling me that the weather in Ypsi is worse than Toronto? I think not! I think we should fire Stuart Beal and hire the company who built the Empire State Building or Maple Leaf Gardens- those master constructors know how to get stuff done and will get this project done way quicker than some inexperienced kid who hasn't constructed a worthwhile building in his life.
Donald
Tue, Aug 31, 2010 : 11:51 a.m.
Does anyone remember who owned the building BEFORE Beal, and let it GET into that sad state? It was Kirchner, who was INTENTIONALLY allowing it to fall into disrepair so he could tear it down and build something new. Instead of letting that happen, THE CITY TOOK HIM TO COURT and asked that the COURT take the building from him and put it into receivership, which the court did. Who was the receiver? Beal. What did Beal do? Worked on the building to save it, and the court charged Kirchner for the work. Then Beal BOUGHT the building off Kirchner (who was in jail for contempt of court for swearing at the judge), and then SOMEONE (we don't know who) set fire to Beal's building. Way to go, City of Ypsilanti. You get EVERYTHING you want, and then try to HANG the guy that helped you get it. The City shouldn't be suing Beal, they should be signing EVERY SINGLE PIECE of paper he can find that will bring the smallest amount of money in to save the building, which is what they asked Beal to do for them!
denise1inaa
Tue, Aug 31, 2010 : 11:42 a.m.
Thank you Ms. Nash for providing the link. Merci beaucoup!
denise1inaa
Tue, Aug 31, 2010 : 11:27 a.m.
Quick question: approximately a year or two ago, there was a private piece of property on Scio Church Road very near I-94. Property taxes were not paid on time apparently, and the owner put up a sign there stating something like "SAVEBEAL.com" to try to solicite sympathy from the community. Is this the same BEAL as the above developer? Is anyone familiar with this story that I vaguely remember? THANKS!
pseudo
Tue, Aug 31, 2010 : 11:26 a.m.
Wow, hey now that was incredible negotiating on the part of the Murdock crew on council. Really, was this worth spending all that money to pick a court fight? Who "won" here? Not Ypsilanti tax payers. Do you think, say, Attorney Barr's advice was all that good on this one? Or or that maybe we could have been more respectful of the property owner? We still really all that far ahead (of what?)anyway? Don't blame Sheldon...this was a poor strategy and now we are just as dependent on Mr. Beal's ability to restore this building as we were before... AND added bonus, he just has to put it back to the way it was before. Yes folks that would be a win for Mr. Beal the property owner. Now how far would we have gotten if our council had taken a more cooperative approach? This far? Probably - and we could have done that for free.
SonnyDog09
Tue, Aug 31, 2010 : 11:24 a.m.
Craig, here are two other building times from the 1930s. The Empire State Building was built in 16 months. Maple Leaf Gardens was built in 6 months. I never cease to be amazed at how long it takes to build things now.
Joe
Tue, Aug 31, 2010 : 11:22 a.m.
As someone who looked at several Beal apartments before moving back to Ypsi, it saddens me that Beal is the company responsible for this project. I just hope they'll do a better job than they do with their apartment units, otherwise the Thompson block will look pretty much like it does now within a few years of being renovated.
alterego
Tue, Aug 31, 2010 : 11:11 a.m.
"Precisely as intended." -- J.C. Beal Construction Company on the banner promising luxury lofts a few years ago.
Silly Sally
Tue, Aug 31, 2010 : 10:50 a.m.
delaying the improvement of an old building that you bought for very little is one thing. Is anyone silly enough to believe that after spending hundreds of thousands of dollars on stabilizing this old building that the owners will allow it to sit empty, paying interest on the money spent to shore it up? A simple answer; "NO".
dading dont delete me bro
Tue, Aug 31, 2010 : 10:43 a.m.
now will the historic commission work w/beal? i see more delays, more lawsuits in the future.
Craig Lounsbury
Tue, Aug 31, 2010 : 10:41 a.m.
"Per the agreement, all exterior walls will be stabilized, all shoring will be removed from the Cross and River street right-of-ways, and the windows and doors will be secured and boarded up within one year." To put that 12 months in perspective it took, from ground breaking to fully functioning facility... 29 months to build Comerica Park 31 months to build Yankee Stadium 34 months to build Ford Field.
Top Cat
Tue, Aug 31, 2010 : 10:26 a.m.
So the city agreed to this. I need to meet with the Mayor and Council as I have a bridge in Brooklyn that is for sale.
Spyker
Tue, Aug 31, 2010 : 10:19 a.m.
I am relieved both sides were able to reach an agreement that will allow restoration of this building. Hopefully the structural and exterior repairs can be completed ahead of schedule. I only wish it hadn't taken so long to get to this point, and can't help but wonder if the arraignment/surrender of the suspected arsonist finally cleared the way for the city to allow Stewart Beal to proceed with his initial plans.
denniso800
Tue, Aug 31, 2010 : 10:14 a.m.
SZo, in another year, we're going to have a vacant, ugly, boarded up old building on that spot instead of a burnt out shell of one. And, two years AFTER that, he has to have at least "temporary windows and doors". Maybe by the turn of the next century we will have something presentable.......... but I'm not holding my breath.
Keepsitreal
Tue, Aug 31, 2010 : 10:01 a.m.
Sweet! so after all this time it's going to end up as it was b4 a year and a half later? That's great news!!!
CountyKate
Tue, Aug 31, 2010 : 10 a.m.
And Judge Shelton gave this his stamp of approval? Does he hate Ypsilanti? What happens when the three years are up and the building has a roof, but no insides? Is it going to sit that way forever? Because I have little faith in Beal and his plans. Actions (or inactions) speak louder than words.
ShadowManager
Tue, Aug 31, 2010 : 9:48 a.m.
People will not know the fire occurred, Beal said. The faade will totally be reconstructed behind the faade, there will still be the same problems that we are working on. So...basically, by August 2011, we're gonna be back to just having a vacant ugly decrepit old building on that spot instead of a burnt out shell of one... Wow, "progress".
Murf
Tue, Aug 31, 2010 : 9:08 a.m.
"The 10-point agreement provides a reasonable timeline for restoring the Thompson Block to the way it was before the fire, said Beal, whose Historic Equities Fund 1 LLC owns the building." GREAT! I loved the way it looked before the fire what with the boarded up windows, et al. So much for progress.