Planning Commission: City-owned Y Lot should be sold through RFP with special conditions
The Ann Arbor Planning Commission weighed in Tuesday night on the future of the downtown Y Lot, giving the City Council some guidance on a possible sale of the city-owned property.
The Y Lot is generating $250,000 a year in parking revenues. After subtracting expenses, including nearly $100,000 in payments that go to the city, the lot generated a profit of about $80,000 for the DDA last year, records show.
Ryan J. Stanton | AnnArbor.com
The goal, according to commissioners, should be "to obtain a long-term, ongoing and growing economic benefit for the residents of the city."
The former YMCA site at the corner of Fifth Avenue and William Street — directly across from the downtown library — has been a surface parking lot for years.
The city bought the land in 2003. Now it has hired a commercial real estate broker as city officials give serious thought to selling the property for private redevelopment.
The Planning Commission laid out a list of recommendations, drawing inspiration from the Downtown Development Authority's recent Connecting William Street Plan.
Commissioners said they'd like to see the property sold with an RFP that contains some or all of the following conditions:
- A building that generates foot traffic, provides a human scale at the ground floor and creates visual appeal.
- A mixed-use development.
- Any vehicular access and parking be accessed via the city's Fifth Avenue underground parking garage.
- An entry plaza or open space that's scaled and located to be activated by adjacent building uses and to be maintained by the developer.
- Generous landscaping incorporated in the entry plaza or open space.
- Mandatory adherence to the city's design guidelines.
- A third-party certification for the building's energy and environmental performance (e.g. LEED Gold or LEED Platinum certification).
Commissioners expressed interest in seeing a building that creates the kind of active sidewalk experience that's lacking along William Street. There was talk about using the upper stories for large floor plate office or lodging and residential uses, with other active uses on the first floor.
They're discouraging any future surface parking on the site or any more curb cuts, instead encouraging all vehicular access via the nearby underground parking garage.
The Ann Arbor DDA's Connecting William Street plan suggests office or hotel development on the Y Lot, with secondary consideration given to workforce housing. The property sits directly south of the Blake Transit Center.
Ann Arbor DDA
Council Member Sabra Briere, who also serves on the Planning Commission, reported Tuesday night that council members seem to be getting conflicting recommendations.
She said the Planning Commission is telling them the Y Lot is a valuable community asset and how it gets developed should be handled with great care — and conditions should be imposed.
"I think council members would listen carefully to that recommendation," Briere said. "I will say that I don't think that's the recommendation they're getting from the broker. The broker is suggesting that council put as few stipulations on this land sale as possible."
She added, "The broker is not suggesting to council that there's a lot of revenue to be acquired through this land sale, and the more limitations and restrictions on property use and appearance, the more difficult it would be to generate the revenue that both pays for the debt and provides additional funding for affordable housing."
The city acquired the property in 2003 for about $3.5 million. The city eventually demolished the old YMCA building on the site, including 100 units of affordable housing.
The city has a $3.5 million balloon payment due on the property in December after years of interest-only payments. It's one of four sites that are now surface parking lots that the city is considering selling for redevelopment as part of the Connecting William Street initiative led by the DDA.
The Y Lot is about 0.82 acres or 35,879 square feet. Net proceeds from the eventual sale — after the city's debt is paid off — is expected to go toward an affordable housing fund.
Briere noted the council has directed the city administrator to issue RFPs for redevelopment of downtown properties in the past and they haven't been successful. She said the council never gave direction on what to include in those RFPs, and maybe it's time it did that.
She said council members who have discussed the Y Lot with her feel very strongly that there should be mixed-use development.
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 email newsletters.
Comments
Widow Wadman
Fri, Aug 23, 2013 : 1:33 p.m.
I think that stipulations that the Planning Commission is proposing for the RFP are too strict and will cause the price for purchase to be decreased because fewer businesses will be willing to compete to purchase the land. I think the City should sell the property with far fewer restrictions and aim to achieve a high selling price in an attempt to cover some of the debt related to building the parking structure across the street. I think that requiring use of the parking structure across the street should not be part of the sale of the land.
Seasoned Cit
Thu, Aug 22, 2013 : 4:04 a.m.
Don't we really need a quality downtown park? Seems that when possible development property goes on the market the NIMBY's always agree that another Park would be best. Of course that would take it off the tax roll and require maintenance etc, but Hey why not... anything to keep the nasty UM from purchasing it and taking it off the tax rolls. What about the special green friendly water permeable asphalt that was used on that parking lot. Can it be recycled and used for bike paths to the Green Belt... or put at the base of the soon to be installed windmill generator that won't pay for itself?
Tom Whitaker
Thu, Aug 22, 2013 : 2:36 a.m.
Just a reminder that the City sold a 6-foot strip off the west half of the north end of this lot to AATA for $90,000 last April. Using the measurements of the parcel from the Washtenaw County map site and a simple cost/SF calculation, that would mean a value of $3,960,000 for the rest of the parcel. Of course, this is just a simple extrapolation. The real value will be whatever someone is willing to pay. How much are the interest-only payments the City's been making? I'm curious if the $100,000 the DDA's been paying annually to use the land for parking has been enough to cover the payments.
leaguebus
Wed, Aug 21, 2013 : 8:13 p.m.
All the bleating a out the Library structure is just that. I was last in there at 1PM on the day of the downtown car show and it was almost full. Plus it's bright and pretty inviting.
Steve Bean
Wed, Aug 21, 2013 : 7:35 p.m.
"The goal, according to commissioners, should be 'to obtain a long-term, ongoing and growing economic benefit for the residents of the city.'" This not only is contrary to sustainability approaches (which the city supposedly embraces) to balance economic considerations with social equity and environmental quality considerations, it's oblivious to the fact that growth is over. Property tax revenues might be ongoing, but they won't be growing.
Steve Bean
Thu, Aug 22, 2013 : 2:21 p.m.
Thanks for the feedback and suggestion, pb. I'm quite clear that most people don't take it seriously. In past comments I've pointed others to the writings of Robert Prechter, Jr. on the Elliott wave principle and the upcoming stock market decline (now underway), other coincident financial asset deflation, and subsequent depression(s) as well as to the writings of Nicole Foss on the global financial situation (not just Ann Arbor's) at www.theautomaticearth.com. I don't have time to relate all the information each time I post. I leave it to others to go from there. Readers who might consider cashing out retirement funds prior to them disappearing in the deflationary credit contraction can still do so. I wouldn't count on it still being allowed next year, or possibly the penalty for early withdrawal will be raised from the current 10%. Short of that (and because some pension funds can't be withdrawn early) moving into short-term US treasuries is a way to possibly avoid losses due to deflation. Rates are generally rising, and most other assets (precious metals, commodities, etc.) have begun to lose value. Real estate should follow closely on the heels of stocks and bonds. Deflation in Europe (not widely covered in the US) is further along than here.
pb
Wed, Aug 21, 2013 : 11:37 p.m.
You have posted several comments in response to this article, and every one has one or more unsubstantiated opinions about the end of the Ann Arbor economic world as we know it. Perhaps you are correct, but I see no reason to believe you are any more so than a person drawing the exact opposite conclusion. You may want to present something of greater substance if you are interested in any of us taking seriously your doomsday scenario.
cindy1
Wed, Aug 21, 2013 : 4:48 p.m.
A cozy relationship seems to exist between annarbor.com's Stanton and council person Sabra Brieir. This is unsettling and makes one wonder about media objectivity.
BobbyJohn
Sat, Aug 24, 2013 : 6:25 a.m.
Actually, Ms Briere does a great job of staying connected with her constituents. Agree or not with her, that is a fact.
Veracity
Wed, Aug 21, 2013 : 9:38 p.m.
I attended the Planning Commission meeting last night and believe that Ryan Stanton reported the proceedings accurately.
DJBudSonic
Wed, Aug 21, 2013 : 7:58 p.m.
Yes, she is by far the most oft-quoted council member in this 'newspaper', and half the time I don't even know what she is saying. Maybe she has nothing better to do than fish around for publicity? Or, maybe she considers getting herself in the newspaper a way of communicating with her constituents?
DJBudSonic
Wed, Aug 21, 2013 : 4:30 p.m.
I would rather the Library buy this lot and build a kids/teen library on it, and then repurpose those areas of their existing building into the conference and meeting rooms they say they need. If it was an architecturally interesting building and had some patron parking it would be a good, low-rise solution for the space. They could connect the two buildings with a skywalk or bridge, and all for less than the $95 million they tried to hang on us before. Maybe this one from Queens could serve as an example - http://www.archdaily.com/263005/childrens-library-discovery-center-1100-architect/
Veracity
Wed, Aug 21, 2013 : 9:10 p.m.
DJBudSonic - The Children's Library Discovery Center (CLDC) is a new addition to the Queen's Central Library and incorporates modern design with features of a children's hands-on museum and a childrens' library. However, the existing Hands-On Museum in Ann Arbor is a marvel unto itself and much more than what is incorporated in the CLDC. The rest of the CLDC is only a more modern version of our childrens' library in a larger proportion appropriate for a much larger population. As a matter of fact I am surprised that the Queens' Central Library is only slightly more than twice as big as the AADL in square footage. As for converting the present library into a conference center I hardly find that necessary. Ann Arbor is replete with conference space and auditoriums if you include what is available at the University of Michigan, at local private and public facilities and at Ann Arbor public schools. Many of the alternatives to a dedicated "library" conference center are under-utilized. Even our present library is successful in having many varied public forums, meetings, educational programs and entertainment events. Only rarely is the capacity of the lower level conference room exceeded. Ann Arbor is blessed with many assets available for public gatherings of all sizes and these should be fully utilized before considering spending many millions of dollars to expand our facilities.
Brad
Wed, Aug 21, 2013 : 3:12 p.m.
I don't fully understand this ""•Any vehicular access and parking be accessed via the city's Fifth Avenue underground parking garage." Are we talking about a physical connection between the Garage Mahal and this new building? Would that be underground or above ground? Both sound pretty expensive to me.
Veracity
Wed, Aug 21, 2013 : 8:13 p.m.
jrigglem - You are correct. Without surface parking lots visitors will have to park in the underground library lot that is only half occupied now. If more residential buildings are built downtown they will be required to incorporate their own parking structures. Apparently, at the time that initial designs for the underground library parking structure were drawn "stubs" were included. I have not seen the architectural diagrams so I do not know exactly how they appear but they represent underground connections to the Y-lot property and I understand to the library itself. The latter was not hooked up to the present library because of the expectation that a new library would be constructed prior to the defeat of the bond referendum last November. These stubs will allow people to move to and from the library parking structure to the building on the Y-lot and possibly to the library.
jrigglem
Wed, Aug 21, 2013 : 7:14 p.m.
I got the impression that they wanted whatever business that took over that area to push all their vehicle traffic to the underground lot and that there would be no parking available at or near the new building
foobar417
Wed, Aug 21, 2013 : 4:27 p.m.
Below ground. They built the garage so that it could be connected to underground parking beneath this building.
PersonX
Wed, Aug 21, 2013 : 4:24 p.m.
I think that the problem is the proximity of the Federal Building. Security does not allow for too much underground parking on the Y site; when the last proposal for a colossal monster on the site was being debated, I recall that being an issue. If memory serves, only one floor of underground parking was allowed, but someone else may remember better.
jrigglem
Wed, Aug 21, 2013 : 1:56 p.m.
Questions: Wasn't that lot just built in or about '09? Before they redid the Transit center? Why are they pushing people to park in the underground lot? Is it not making money? I personally would never park my car underground. Claustrophobic. This all just seems like bad planning on the city's part.
jrigglem
Wed, Aug 21, 2013 : 5:57 p.m.
No, I personally am claustrophobic. I won't go into that structure and for the ones above ground I have to face outward.
Peter Hochgraf
Wed, Aug 21, 2013 : 4:25 p.m.
Have you been in the new underground structure? It's far from being claustrophobic in my opinion, heck there are above ground structures in A2 which are more claustrophobic then the underground one. But ya, didn't they just make that a parking lot?
Steve Bean
Wed, Aug 21, 2013 : 1:06 p.m.
"Net proceeds from the eventual sale — after the city's debt is paid off — is expected to go toward an affordable housing fund." Whether it was for affordable housing or some other specific purpose, tying the proceeds of a future sale to anything is not sound government.
Mick52
Wed, Aug 21, 2013 : 3:40 p.m.
I like to refer to the directives as "social agenda" which is something the liberals have done since taking over complete control. This is why A2 is the homeless/low income housing capital of Michigan. Have never seen such a disregard for essential services in favor of non essential any where in the US.
Indymama
Wed, Aug 21, 2013 : 3:01 p.m.
Well, our City Council under the Mayor's directives has been making "not sound government" decisions for years!!! It is time to vote in new Council members not tied to the apron strings of our current Mayor.!!
RUKiddingMe
Wed, Aug 21, 2013 : 12:59 p.m.
I think it woukld be informative and helpful to A2 citizens to see not jut the amount the city paid for the building, but also the relocation of all the residents (and ongoing housing, if they continued subsidizing after relocation), the cost of asbestos studies, the cost of demolition, total of INTEREST ONLY payments made to date, and the total of parking revenue generated. This way we could see the NET gain/loss from the city's actions here. Also, I think it's worthy of note that they bought it thinking to continue its use as affordable housing, then realized AFTER PURCHASE that the asbestos issue was too much to deal with, then had to relocate all the residents and assist w/ their affordable housing needs (are they STILL doing this?), then demolish it, and now here we are after years of interest only payments w/ balloon payment looming. It seems to me like they really screwed up. I would advise what the broker is advising, and to stop trying to handle real estate. You're not good at it. It's about on par with how you handle public art. Time to get out of the business. Let the developers develop. You just make sure trash gets picked up and fix the roads. Stop prospecting with our money.
Mick52
Wed, Aug 21, 2013 : 3:38 p.m.
I was told by a former city employee who I consider a reliable source that housing the residents in hotels after the Y was deemed unfit for occupants, it cost the city over a million dollars, maybe two. Would be an interesting figure to know, even if this amount is not true.
RUKiddingMe
Wed, Aug 21, 2013 : 1:17 p.m.
Also please include the cost of turning it into a parking lot, including the automated metering and landscaping
Arboriginal
Wed, Aug 21, 2013 : 12:54 p.m.
Progress please. How about premium materials and a first rate architect? One Ashley Terrace is enough.
Veracity
Wed, Aug 21, 2013 : 7:01 p.m.
Don't forget: Ashley-Terrace went bankrupt!
PersonX
Wed, Aug 21, 2013 : 4:21 p.m.
Or Varsity / City Place!!!!!!!!!!
cfsunlet
Wed, Aug 21, 2013 : 12:52 p.m.
If I lived downtown, I would love to see a small grocery store, such as Trader Joe's on this site. The next 2 floors have a lot of possibilities including shopping/restaurants/clubs/large meeting or banquet hall with great views looking south and a raised walkway to the William street parking structure. The next 10 floors could be a mix of hotel and residential, with some kind of mixed public/private space on the roof. Maximizing the flexibility of this space, rather than putting up a big single-use building seems like a no-brainer!
Kyle Mattson
Fri, Aug 23, 2013 : 2:28 p.m.
I live in a downtown area and the delivery truck noise is easily ignored, what is bad are the garbage trucks with their back up beeping and slamming of dumpsters. The delivery truck traffic is an interesting point though.
Widow Wadman
Fri, Aug 23, 2013 : 1:20 p.m.
Interesting comment, SonnyDog. I hadn't thought about noise from delivery trucks potentially being an aggravation for downtown residents but I had considered higher prices due to the cost of higher rent.
SonnyDog09
Wed, Aug 21, 2013 : 4:49 p.m.
If someone ever does build a downtown grocery store, folks will not like it because: 1. The prices will be very high to pay the sky high rent for the building. 2. Trucks delivering produce and other goods will interfere with normal traffic flow. Even if the trucks deliver during the evening, folks will complain about the noise. The very folks who ask for a downtown grocery will be the loudest complainers.
Mick52
Wed, Aug 21, 2013 : 3:35 p.m.
Actually I think that since the building will have to house some low income folks, the store will have to be an Aldi.
Dog Guy
Wed, Aug 21, 2013 : 12:52 p.m.
The Ann Arbor Planning Commission didn't specify art or building name. Considering the immense amount of our money spent on YMCA residents in buying this site, I suggest another blinking shaft and Water Street.
Veracity
Wed, Aug 21, 2013 : 12:35 p.m.
The DDA and the Planning Commission wish to eliminate all surface parking in downtown Ann Arbor, forcing visitors to park in the subterranean library lot that is averaging 50% occupancy now. Interestingly, the Y-lot has 83 spaces and averages 70% occupancy while bringing in $248,000 revenue annually. Those who park in the Y-lot could just as easily park in the underground library lot. No one has asked Y-lot users why they prefer the surface lot to the underground lot across the street. However, continued extensive use of the Y-lot indicates a preference over the library lot. Hopefully, City Council members will remember this as they make final considerations about the Y-lot's future. Furthermore, the $3.5 million balloon loan payment due at the end of December could be refinanced for 25 years with the Y-lot's present revenue sufficient to service a loan with an interest rate of 3% or less. If the interest rate is higher then the DDA or City will have to subsidize servicing the loan by $35,000 annually for each percentage point of higher interest rate. This added cost, if required, is not insurmountable and likely would disappear in a few years as the parking fee rate is increased. A parking fee increase from the present $1.40 per hour to $1.60 will produce the additional $35,000 required to service a loan at 4% (and $1.80 per hour for a loan at 5%). Furthermore, Sabra Briere, the City Council representative to the Planning Commission, informed me that a developer will only be interested in constructing a residential building. If the sale of the Y-lot is done before the D1/D2 zoning ordinance is rewritten (with the likelihood of the Y-lot being downsized to D2 from its present D1) then a 14-story 180 foot tall structure can be developed on the land. This sized building will have a significant and permanent impact on Ann Arbor's skyline and the character of downtown. Contact your City Council person if you do not want a 413 E. Huron St building on the Y-lot.
Steve Bean
Wed, Aug 21, 2013 : 7:23 p.m.
Veracity, if the city sells the lot, it can then pay off the loan. Secondly, if the development fails (or isn't even started, which is also a possibility), the property would be resold to another owner or possibly be bought back by the city at a lower price. Thirdly, it's not a stable revenue stream if parking demand declines, which it will in the next year or so. At this point, if i had my choice I'd turn it into a public garden, but that's not likely to happen, and it wouldn't pay off the debt. Keeping it a surface lot won't either. (I previously advocated for the library to purchase/trade for it for a new building, along with a land swap to put the transit center where the library lot is, but I didn't get that either.) This is all in the context of the city having built the underground parking structure at the peak of finance/oil/driving/parking thus turning the former Y lot into a "problem" rather than an inexpensive component of managing our way through those peaks. If it's sold without restrictions, could the new owner leave it as a parking lot? That's fine by me. I'm doubtful that it'll get built on—financing will be extremely hard to come by, and demand for both new residential and commercial space will level off if not decline soon as empty nests are refilled. Maybe it'll become a public garden space after all.
Veracity
Wed, Aug 21, 2013 : 6:47 p.m.
Good thinking, Steve Bean, if you do not care what is constructed on the lot or that the resulting enterprise may fail, producing no revenue that can be taxed. Trading stable parking fee income for ..... what?
Mick52
Wed, Aug 21, 2013 : 3:34 p.m.
I don't pay to park. I find a space in the areas surrounding downtown and hoof it. Saves lots of money and I get some exercise. Heck I rarely go downtown, there is nothing there anymore other than expensive restaurants and panhandlers.
Steve Bean
Wed, Aug 21, 2013 : 1:03 p.m.
Interest rates are rising. When parking rates are increased (and the DDA will probably do so, in spite of the consequences), demand will fall further. I say further because it will probably begin falling before then. The city's best option at this point is to sell the property.
NSider
Wed, Aug 21, 2013 : 12:31 p.m.
No matter what goes in, on 2nd floor put in the downtown station of the elevated light rail system. Perfect spot for it, with escalators to the Blake Transportation Center.
Brad
Wed, Aug 21, 2013 : 2:57 p.m.
The first Tomorrowland Monorail station. How exciting!
a2citizen
Wed, Aug 21, 2013 : 12:15 p.m.
So, basically we are looking at a 14-story apartment building catering to students.
4 Real
Wed, Aug 21, 2013 : 11:03 p.m.
If you sell it today with no restrictions, that is what you will get.
dconkey
Wed, Aug 21, 2013 : 12:02 p.m.
I think it would be a perfect place for another Starbucks and a Subway.
Craig Lounsbury
Wed, Aug 21, 2013 : 12:23 p.m.
only if the Subway lettuce is organic and the Starbucks coffee beans are picked by unionized workers.
Jim Mulchay
Wed, Aug 21, 2013 : 11:48 a.m.
In jest I suggest this will be the future site occupants - street level - (1) Son of Blimpy Burger; (2) Zingerman's South; (3) a Starbucks (or similar firm) and above (4) a mix of affordable, student and luxury apartments and on the roof a restaurant
Homeland Conspiracy
Thu, Aug 22, 2013 : 11:35 a.m.
(5) a CVS
Homeland Conspiracy
Wed, Aug 21, 2013 : 11:41 a.m.
Doesn't "city-owned property." mean tax payer owned? If so I want a check went they sell it since I paid for it
Brad
Wed, Aug 21, 2013 : 2:56 p.m.
No, that money is for making other people's housing affordable, not yours.
Craig Lounsbury
Wed, Aug 21, 2013 : 12:15 p.m.
your check is in the mail.
robertalanhaber
Wed, Aug 21, 2013 : 11:30 a.m.
The City should take its time. Refinance the note. Interest rates are low. The first priority is to get downtown zoning and guide lines reconsidered. The Y lot is currently zoned D-1. That should be changed. An overall review is underway, one that should have been done several years ago, which would have avoided the bad decisions at 413 East Huron. The Connected William Street/DDA report was seriously flawed. The Council received it, but did not approve or accept it. The Planning Commission is pushing it, using it as a resource document, in line with the "maximum density" views that have been associated with the Mayor. The Planning Commissioner chair, a Mayor's appointment, is now running for City Council, challenging Jane Lumm, the independent breathe of fresh air on the Council. I hope this Planning Commission recommendation, and its Chair are both put aside. No more big mistakes, Please. Let the broker wait for his commission.
4 Real
Wed, Aug 21, 2013 : 11:01 p.m.
Oh please! The site is in the center of downtown. What do you want? Another park?!
Bcar
Wed, Aug 21, 2013 : 11:05 a.m.
Need to put something in there that prevents UM from buying the land!!
B2Pilot
Thu, Aug 22, 2013 : 12:06 a.m.
Mick52 the Holiday Inn on Plymouth rd is in Ann Arbor is it not? ? U of M moved this job fair that had been held at the Law School for decades to the Holiday Inn. I can't tell you how many events U of M holds off campus at the local hotels but it is HUGE just ask anyone in the business.
Angry Moderate
Wed, Aug 21, 2013 : 8:20 p.m.
Mick, law firms always recruit in hotels. Law schools rents out a hotel, and each firm gets a room for interviews. They don't want all the employers to share a big conference room, they want privacy.
Mick52
Wed, Aug 21, 2013 : 3:30 p.m.
If the city owns it and is concerned about the U buying up property, you do not have to worry about that. However, many people have said the city needs a conference center. My daughter recruits for a prominent law firm and recently they came to A2 to recruit. Lacking a conference center in A2, they had to conduct the interviews at the Holiday Inn at Plymouth and US-23. So perhaps we should put in a conference center, either UM or A2.
A2comments
Wed, Aug 21, 2013 : 10:50 a.m.
The broker wants his commission. The more conditions, the harder to sell it, the harder to get his commission. The city should move this property before the pending payment is due.
Veracity
Wed, Aug 21, 2013 : 12:56 p.m.
For a contrary view see the robertalanhaber and Veracity comments which follow. You may not have considered the associated issues thoroughly enough.