Developer determines Heritage Row project not viable, Ann Arbor officials say
(This story has been updated to include comment from Alex de Parry.)
The developer of Heritage Row apartments has indicated he no longer plans to pursue the 85-unit project due to its apparent inviability, Ann Arbor officials said today.
That leaves city officials assuming Jeff Helminski and his development team now will push forward with the controversial City Place apartments — a by-right project already approved for the same site that includes knocking down seven century-old homes on Fifth Avenue.
It's the latest twist in a roller-coaster saga that's lasted years and, in recent weeks, offered a glimmer of hope to residents and city officials that the homes might be saved.
A look at the Heritage Row proposal laid out last year.
The City Council was expected to vote Monday night on final approval of a revised version of Heritage Row.
The city announced via e-mail today that the Heritage Row public hearings have been cancelled for Monday, as the planned unit development zoning and site plan have been withdrawn at the request of the developer.
But Hohnke said he talked to Helminski on Thursday and learned the project, as initially put together by Ann Arbor developer Alex de Parry, never was economically viable.
"He was pretty conclusive in saying this was the end," Hohnke said of what Helminski told him about Heritage Row.
After talking to Helminski, Hohnke said it seems there's nothing else the city can do to help the developer find a path forward on Heritage Row now.
Helminski could not be reached for comment. De Parry was the original developer who recently turned the project over to Helminski.
Hohnke said Helminski told him de Parry underrepresented about 14,000 square feet of construction costs on Heritage Row — a $1.3 million hit that was too much to overcome.
"This was a mistake on the previous development team's part in not providing or having the appropriate numbers in the first case," Hohnke said.
De Parry said that's not true.
"To clarify, everyone was working from the same spreadsheets and pro formas," he wrote in an e-mail. "To say that 14,000 square feet was missed is both ridiculous and untrue."
With it now looking likely City Place will go forward, Hohnke said in seems in hindsight that the battle that's taken place over the 1.23-acre site at 407-437 S. Fifth Ave. was never about Heritage Row. Looking forward, Hohnke said, the real underlying issue is the city's R4C multiple family residential zoning, which allows projects like City Place to be built.
Hohnke and other council members, including Sabra Briere, D-1st Ward, have said they're still waiting for an advisory committee formed by council more than two years ago to study the R4C and R2A residential zoning districts to come back with recommendations. That could include potential zoning ordinance changes to prevent future projects like City Place.
"We have to recognize that we are dealing with an R4C zoning that does not reflect community values and desires for how we build in our near-downtown," Hohnke said.
Hohnke also said he still believes a historic district for the Germantown neighborhood, recommended by a council-appointed study committee, was the right systemic solution to stop City Place. In July 2010, the council voted 6-4 against granting historic district status.
The six who opposed the historic district were Stephen Rapundalo, Christopher Taylor, Tony Derezinski, Margie Teall, Marcia Higgins and Sandi Smith.
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.
Comments
HappySenior
Sun, Oct 23, 2011 : 10:42 a.m.
If you are unhappy about how the city government functions, on November 8, you can speak with your vote. We have the government we deserve.
Stan Hyne
Sat, Oct 22, 2011 : 1:49 p.m.
After many years of the city council wanting more and more they lost all. The developer just didn't realize how smart the city council was.
hermhawk
Sat, Oct 22, 2011 : 1:13 p.m.
This fiasco, along with the Ambassador Bridge debacle in Lansing goes to show only that elected officials are more responsive to businesses and lobbyists than to the voters who put them in office.
A2comments
Sat, Oct 22, 2011 : 11:51 a.m.
It appears that a lot to time and effort was wasted by the city, most recently in trying to get the original developer and then the new owner to change back to the original design which apparently was not viable ever... Perhaps the deal with the new developer should have been attempted AFTER the new developer had run his numbers on all options. I would hope the city would ensure that the new developer not deviate one iota from the plan given his unwillingness to work on a compromise.
BHarding
Fri, Oct 21, 2011 : 10:43 p.m.
I wish people would buy those old homes as single family/duplex residences and restore them. Just a dreamy wish. Some are real gems.
Wolf's Bane
Sat, Oct 22, 2011 : 11:49 a.m.
I agree. I have actually inquired, but to no avail. The "developers" seem adamant about destroying ever last home for the sake money.
Arboriginal
Fri, Oct 21, 2011 : 10:04 p.m.
Hee Haw! This is too funny! At least now the city won't be giving away parking spaces. Ann Arbor! Population 113,934! SALOOT!!!!!
Wolf's Bane
Fri, Oct 21, 2011 : 9:07 p.m.
Unbelievable. Just unbelievable and sad.
clownfish
Fri, Oct 21, 2011 : 8:54 p.m.
What we clearly have learned is that citizen involvement and representative republics are non-functional and should be replaced with...what again?
David Rhoads
Fri, Oct 21, 2011 : 8:47 p.m.
There are different definitions of "economic viability", as evidenced by this latest announcement. The out of town developer, Jeff Helminski, is evaluating this devlopment from a pure Return On Investment (ROI) viewpoint. Alex DeParry, on the other hand, factored in his love for Ann Arbor, as part of his ROI calculation, and he was willing to construct Hderitage Row for the good of the community, not just for the good of his bank account. It is really too bad that some of the neighbors, and some of City Council, could not get past their own hang-ups and make a choice that would have been good for the community. The result will now be the loss of several historic structures and the construction of a ho-hum apartment building. While this entire process has been disappointing, one can hope that those involved will learn to consider the bigger picture, and take a more positive role when the next attempt to preserve a portion of Ann Arbor's charm is brought forward.
snapshot
Fri, Oct 21, 2011 : 9:07 p.m.
There is definitely a romantic appeal to this line of thought but I would have to disagree that such a disparity of "economic viability" would exist in real estate development, regardless of "city love". Their remains the economic barrier of a "cost burden", something Ann Arbor city officials seem to omit from their decision making vocabulary.
snapshot
Fri, Oct 21, 2011 : 8:20 p.m.
It appears "You can't always get what you want" is becoming a "reality" for Ann Arbor. Seems like Hohnke and Briere function in a fantasy world where government officials know what's best for everybody.
omniskeptic
Fri, Oct 21, 2011 : 8:18 p.m.
This one looks like a lost cause at this point. What we need to debate for the future is how to prevent developers from acquiring contiguous blocks of property like this. Or ... how about a conservation of waste land ordinance: no new nonsense like this until you eat your vegetables ... I mean, until the Maiden Lane / Broadway mess is cleaned up?
pbehjatnia
Fri, Oct 21, 2011 : 8:05 p.m.
um, just what exactly is supposed to be so german about this stretch anyway? it's about as german as the heidelberg. seriously. someone finally shut city council up and let 'em build.
Veracity
Fri, Oct 21, 2011 : 7:55 p.m.
I guess for Jeff Helminski, financial viability is defined by how much construction financing can be borrowed. If financial viability were to include the likelihood of operational business success after the building is completed then neither Heritage Row or City Place should be considered as financially viable. Apparently, a sufficient number of City Council members are willing to destroy the face of Ann Arbor for the purpose of advancing new high-density construction. They are also willing to risk city financial destitution as with the construction of inordinately expensive subterranean parking structures next the the library and for the future Village Green Ann Arbor Apartments. With the construction of Zaragon 2 and The Varsity in addition to other recent student resident buildings, Ann Arbor will soon be saturated with luxury student housing (the only type being built). Expect some new construction to go into bankruptcy which will mean the loss of TIF funds for the City while leaving behind aesthetic degeneration.
SMAIVE
Fri, Oct 21, 2011 : 7:27 p.m.
Wait for it...and the City of Ann Arbor announces the purchase of...
Cosmic Ray
Fri, Oct 21, 2011 : 7:05 p.m.
Maybe our local activists could "occupy" Fifth Ave.
a2grateful
Fri, Oct 21, 2011 : 6:24 p.m.
Multiple silver linings are hopefully realized by Mr. and Mrs. de Parry: 1) They sold their interest in CP by-right development, hopefully recouping some of the repeated and nonsensical costs of revised HeRo site plan after revised site plan, likely into perpetuity (This is the site plan that never ends . . . It keeps going on and on my friends . . . ; ) 2) They are no longer forced to participate in the lunacy of the group aka a2 city "government". 3) They are no longer the villains and enemies of just another NIMBY neighborhood association. 4) If the true HeRo cost estimates are substantially higher than their estimates, they saved themselves from financial hardship. Best wishes to de Parrys!
thefoodandwinehedonist
Fri, Oct 21, 2011 : 6:13 p.m.
I love going to Ann Arbor's historic Germantown district. All the old world style homes, German restaurants, souvenir shops. The massive Oktoberfest celebration and the upcoming Christkindlmarkt are truly local heritage treasures.
Arboriginal
Fri, Oct 21, 2011 : 9:58 p.m.
Oh I like it!!!!
rusty shackelford
Fri, Oct 21, 2011 : 6:28 p.m.
All those activities would require the residents of said district to do something other than complain.
Old Salt
Fri, Oct 21, 2011 : 6:08 p.m.
Just leave 5th Ave. the was it is beautiful old homes
John of Saline
Fri, Oct 21, 2011 : 7:55 p.m.
Feel free to purchase them and fix them up yourself.
Bob Martel
Fri, Oct 21, 2011 : 6:04 p.m.
So in the end, Heritage Row dies because of a spreadsheet error?
beuwolf
Fri, Oct 21, 2011 : 6:08 p.m.
Per Helminski. I'm sure there are other versions of this story yet to unfold.
Grumpy
Fri, Oct 21, 2011 : 6:03 p.m.
Awful news. City council as a whole dropped the ball on this one. And didn't I read that once Heritage Row is approved, City Place could never be brought back? If that statement is true, in hindsight, if council approved Heritage Row in the beginning, City Place would have been off the table And also Heritage Row wouldn't have been built because de Parry wouldn't have turned a profit. The irony!
beuwolf
Fri, Oct 21, 2011 : 5:54 p.m.
Tony Derezinski is chairing the R4C committee. Tony, isn't it about time to get this done?
rusty shackelford
Fri, Oct 21, 2011 : 5:44 p.m.
I'm really disappointed in your reporting here, Ryan. You're generally the only passably competent staffer on the site, so I'm surprised that this piece doesn't meet any measure of journalistic objectivity. Reporting as fact an item heard third hand from a notoriously unreliable source who also has an obvious agenda (i.e. Hohnke)? This story, or at a minimum those parts of it, really needs to be pulled barring independent confirmation or a response from Helminski or de Perry. Truly disappointed.
rusty shackelford
Fri, Oct 21, 2011 : 7:53 p.m.
(What I'm confused by is whether city staff is going on anything other than Helminski in saying that de Perry's projections were off; if they knew that independently, it seems like info that should have come to light a long time ago.)
rusty shackelford
Fri, Oct 21, 2011 : 7:49 p.m.
Ryan--fair points, and thank you for the clarification. It would have been helpful to know that in the original. Did the other sources confirm the reason for withdrawal that Hohnke gave, or just that the plan was being withdrawn?
Ryan J. Stanton
Fri, Oct 21, 2011 : 7:31 p.m.
@rusty — I confirmed the developer's decision to withdraw the Heritage Row proposal with multiple reliable sources at city hall. The city also announced via e-mail today that the Heritage Row public hearings have been cancelled for Monday, as the planned unit development zoning and site plan have been withdrawn at the request of the developer. Helminski hasn't been returning calls from the media for weeks so we weren't going to hold this breaking news to get his comment. You'll notice in the story I did put a call into him and did not hear back.
Bonsai
Fri, Oct 21, 2011 : 6:29 p.m.
agree -- a third-hand description of a supposed accounting error with no corroboration is disappointing --
rusty shackelford
Fri, Oct 21, 2011 : 5:52 p.m.
I mean, did you talk to *anyone* except Hohnke? Fer crying out loud, the *Michigan Daily* editors would have sat on or crushed this story. Also, they know AP style.