Washtenaw Avenue shopping center project wins approval from Ann Arbor City Council

Located directly across the street from Whole Foods, the proposed development is on a 7.45-acre site at 3100 Washtenaw Ave.

The property has been vacant since a former car dealership was demolished to make way for a previously planned project that was never developed.

"This site had a previous site plan that was approved and unfortunately it didn't go anywhere, so I'm hoping this project receives ample financing," said Council Member Stephen Kunselman, D-3rd Ward. "It's certainly a tough market out there for retail."

Council Member Tony Derezinski, D-2nd Ward, said the site plan was reviewed by the Planning Commission in detail before coming to council.

"This development takes a piece of land that you've been looking at across from Whole Foods there and really makes it something that I think is going to be very attractive for the area," he said. "It also comports with a lot of the themes that we're working on for the Reimagining Washtenaw Avenue — for instance, sidewalks, a bus turnabout."

Added Derezinski: "The parking will be in the back, rather than in the front, which is again one of those things that really comports with how we want to see that corridor look."

Council Member Christopher Taylor, D-3rd Ward, said he wanted to echo Derezinski's enthusiasm for the project.

"This has been an area of the city and the ward which has long been underutilized, and it will, I think, be a great benefit to the area and the neighborhood," he said.

The site plan calls for demolishing six vacant buildings and constructing four retail buildings with some potential for office space. It also includes 310 parking spaces, 30 covered bicycle parking spaces, new public sidewalks, a covered bus stop and a new traffic signal.

Plans for the site were unveiled in February 2011, and received a mostly warm welcome from neighbors and residents at a public meeting. Council Member Marcia Higgins, D-4th Ward, praised the developer for working cooperatively with neighbors.

Plans have been in the works for a retail development at this site for years. In 2006, City Council approved a site plan and development agreement for The Shops at Arlington, a 138,000-square-foot retail project with underground parking.

However, plans for the $9 million project, which was originally developed by Gordon Mathews and Bill Conlin, expired in fall 2009 as lender Comerica Bank sought to sell the property following foreclosure.

Ann Arbor real estate owner and developer Campus Realty bought the property from the lender in 2010, and is partnering with Chicago-based North Shore Properties Group on the Arbor Hills Crossing development.

Earlier this year, Tom Stegeman of Campus Realty said that Arbor Hills Crossing will have no large anchor, such as the Whole Foods Market across the street.

He said he hopes to attract national chains, regional players and local businesses. It will include a mix of tenants, including most likely food use, apparel and specialty retailers.

He also said North Shore, who is handling tenant selection and leasing, has been in serious discussions with a number of potential tenants, and there is strong interest.

To help finance the project, the developers proposed a brownfield plan to remove contaminated soils at the site, which are a result of the former dealership and gas station.

A brownfield property is one in which site conditions present an obstacle to redevelopment. Brownfields can can include properties that are contaminated, blighted or functionally obsolete.

Ann Arbor’s Brownfield Review Committee voted in September to approve tax-increment financing assistance for the project. The City Council offered a 10-0 vote of approval Monday for the brownfield plan, which now awaits county approval.

The brownfield plan includes $6.7 million in tax-increment financing that would be paid back over a period of 19 years. Of that total, $5.4 million would reimburse the developer for eligible expenditures, and the remainder would cover administrative fees and other costs.

Council Member Margie Teall, who was present for part of Monday's meeting, was not in attendance when the votes were taken on Arbor Hills Crossing.