University of Michigan CFO: Purchasing Blimpy Burger property 'makes so much sense' for school's long-term plan
The Blimpy Burger property will soon be purchased by the University of Michigan.
AnnArbor.com file photo
On Thursday the school's eight-member Board of Regents unanimously approved the $1.075 million purchase of the parcel that houses Krazy Jim's Blimpy Burger and an adjacent apartment building. The $425,000 purchase of the neighboring property was also approved.
The two properties are owned by Patricia Shafer, the widow of Blimpy Burger's original founder, Jim Shafer.
U-M Chief Financial Officer Timothy Slottow said the properties offer the school's downtown campus a chance to expand its footprint. Central campus, he said, is significantly crunched for space.
"When we do purchase property, it is for a very specific mission driven purpose or it is very strategically located property," he said in an interview with AnnArbor.com. "These houses on Division Street, you can see they're right on the edge of central campus and we have virtually no empty buildable property on central campus at this moment."
Slottow said university officials are discussing possible construction projects for the site, but said "at this minute there's no project that we're ready to come to the board with."
He said any building constructed on the site will be a very large, multimillion dollar project— likely in the eight-figure range.
The properties that contains Blimpy Burger and two residential houses are owned by Patricia Shafer. She has agreed to sell them to the university for $1.5 million.
"It's a big site," he said.
The two properties sit on a combined 0.27 acres of land, between the school's West Quadrangle dormitory and Perry Building and near its Thompson Street parking garage.
They sit next to an existing university-owned parking lot.
On the block are six other properties, four on South Division and two on East Madison Street. David Copi, of Copi Properties, owns two parcels on South Division. The other four properties are rentals managed by Arch Realty and owned by South Division Street Properties LLC, a corporation registered to former U-M athletics director Bill Martin. It's unclear if these property owners and the university will enter into a purchase agreement.
What is clear, however, is that the school is looking to grow its core area: central campus.
"It's always nice, when you're the size that we are, when you have some opportunity to build or put a building on your core site," Slottow said. "We are basically land constrained on central campus.
These properties on Division Street are just so strategically located on that street, that as long as we get market price it just makes so much sense, looking out five, 10, 15, 20 years."
A map of the Blimpy Burger parcel, highlighted in red, and surrounding properties. The property next to Blimpy Burger, 545 South Division Street, will also be purchased by the university.
U-M image
This isn't the first time U-M has eyed land on Division Street. A decade ago, the school bought a block of houses on the corridor in order to expand the Thompson Street parking structure to Division Street. More recently, two houses at South Division and East Jefferson near the Institute for Social Research were purchased prior to a multimillion dollar renovation of the institute.
"ISR was a very difficult addition to do," said Slottow, adding that expansion was made "much easier" by purchasing properties nearby the existing institute.
U-M will honor all leases at the two properties until the end of August 2013. Blimpy Burger owner Rich Magner says he intends to find a new location for the restaurant, although he hasn't begun looking yet. He said he wants to remain downtown near his largest customer base: U-M students, staff and sports fans.
After reports that U-M planned to purchase the Blimpy Burger building —which has been featured on the Travel Channel and Man V. Food— Ann Arbor native Daniel Lord created a "Save Blimpy Burger" page, which now has more than 1,600 likes.
Regent Andrea Fischer Newman said she "didn't get that much blowback" on the purchase initially.
"I think there was sort of an 'Aw, I love Blimpy Burger'" feeling, she said.
Comments
Mike D.
Sat, Dec 15, 2012 : 2:28 p.m.
University of Michigan is one of the very few bright spots in this state. It astounds me that people are complaining that it's expanding. This has been a university town since well before anyone here was born. The U has been expanding for hundreds of years. Living in Ann Arbor and complaining about the U is like living on earth and complaining about the sun rising every day.
Mercutio
Sat, Dec 15, 2012 : 9:39 p.m.
I'm not complaining about U of M being in Ann Arbor. I'm complaining about it's endless spending and hiking of tuition - it's pricing itself out of its primary mission, to educate citizens of Michigan. We pay for this school. The University of MICHIGAN should have majority Michigan students, not out-of-state and foreign students. There's a difference between being innovative and competitive, and just growing for the sake of growing. They don't even have a plan for this parcel, they just want it. Yes, I have a problem with that, cause it's my taxes paying for it.
Mercutio
Sat, Dec 15, 2012 : 9:23 a.m.
I've lived in the Ann Arbor area for 24 years now, ever since I started undergrad. And never, in all that time, has there not been multiple major construction projects at U of M. As a Michigan taxpayer, I have to question why is there this constant building, building, building, ever-expanding? And every year, the U raises tuition more and more above the cost of living. Stop, just stop! You don't even have a use for these purchases yet, but like a greedy child you grab as much as you can! Where's your fiscal responsibility? This behavior "makes so much sense" to you?
JW
Sun, Dec 16, 2012 : 2:52 a.m.
What makes you so sure your taxes are paying for it? Do not forget the University runs very large fund raisers that brings in millions of dollars. Maybe contributers' money is paying for this.
Frustrated in A2
Fri, Dec 14, 2012 : 9:29 p.m.
So long downtown Ann Arbor, you'll be missed when the university takes you over!
Jaime
Fri, Dec 14, 2012 : 8:50 p.m.
Its called campus creep. Next they will want to move across the street and remove even more tax base from the city. Maybe they should ask the College of Architecture and Urban Planning to come up with a plan to build up instead of out. Blimpy takes up such a small space. Perhaps whatever the U decides to build there could a corner to Blimpy Bugrer.
Liberty Soule
Fri, Dec 14, 2012 : 8:20 p.m.
The Blimpy atmosphere will be missed, but just move Blimpy Burger to the old Packard Pub location and be done with it.
Napalm.Morning
Sat, Dec 15, 2012 : 6 p.m.
I was unaware that "the people" could just up and decide to move a private enterprise to another location . . . I generally thought that the business owner would evaluate the economic circumstance and make a decision as where to locate their private business all while considering costs and market driven location factors such as customer expectations and convenience. Thanks for the insight.
Mackinac Straits
Fri, Dec 14, 2012 : 5:53 p.m.
Between killing Blimpy Burger and the Big House run, it was an exceedingly bad PR week for the University as they wrecked two of the best things about Ann Arbor.
sultanofswing
Sat, Dec 15, 2012 : 1:55 a.m.
UM thinks it is AA ...and maybe they are right !
15crown00
Fri, Dec 14, 2012 : 5:45 p.m.
Maybe they should be required to pay property taxes
Napalm.Morning
Sat, Dec 15, 2012 : 5:52 p.m.
As a people, though, we have deemed these institutions "public", hence when we impose taxes on them, we are, in essence, imposing taxes on ourselves! The monies to satisfy the tax obligation do have to come from somewhere--increased tuition, state tax (support) dollars? Which then leads to the curious arrangement of private endowments and other tax advantaged giving to public institutions. Do we continue to offer tax incentives to give, in the form of income tax deductions, while then imposing a property tax on those same dollars for the municipal services delivered thereon. There seems to be a need for some element of a tax policy consistency in this argument There are no easy solutions. There will be ongoing debate of the UofM economic benefits vs. the UofM economic burden on the municipalities. I think it is time, once again, to evaluate the income tax levied on the employees within, and residents of, the city.
J
Fri, Dec 14, 2012 : 5:05 p.m.
No other organization in Ann Arbor could afford to spend 1.5 million for a quater acre of land. It is just more evidence that public universities have limitless amounts of cash on hand. Is this worth the increases in tuition and taxes we face? Really??
sultanofswing
Sat, Dec 15, 2012 : 1:53 a.m.
Seen the salary article ?
leaguebus
Fri, Dec 14, 2012 : 4:28 p.m.
Be happy that UM provides some stability to AA. With all the mindless tax cuts from the state and corresponding losses of educational revenue, the UM has done a good job becoming less defendant on shrinking state revenues. If the development of this property brings more jobs to the area, I am all fo it. I have frequented Krazy Jim's since the early 60's when I came to school here. I was just there two weeks ago with my son. Lots of kids there with parents. I hope Rich can work out the logistics of keeping his business going through all this change. Triple cheese on an onion roll, please!
Nicholas Urfe
Fri, Dec 14, 2012 : 6:07 p.m.
"Be happy that UM provides some stability to AA" Thank you sir! May I have another! While some may be thankful for abusive the practices and accept them at any cost, some of us believe there must be limits and consideration of the community.
Tony
Fri, Dec 14, 2012 : 4:25 p.m.
Looking at just the issue of property taxes (or their absence), all of the following state educational institutions are exempt from property taxes in their communities: Central Michigan University, Eastern Michigan University, Ferris State University, Grand Valley State University, Lake Superior State University, University of Michigan (Ann Arbor), University of Michigan–Dearborn, University of Michigan-Flint, Michigan State University, Michigan Technological University, Northern Michigan University, Oakland University, Saginaw Valley State University, Wayne State University, and Western Michigan University. If all those institutions are required to pay property taxes, where will the money come from? Partially the state government (which will simply pass the costs through to all of us tax payers); the remainder will almost certainly come from higher tuition at all those institutions. Higher taxes, higher tuition -- a couple of ideas with a half-life of about 3 seconds.
leaguebus
Fri, Dec 14, 2012 : 4:40 p.m.
Good comment! The Republicans are at war with public education. They cut funding yearly, then as schools get worse, they embrace a private corporate model. Maybe they can get the University of Phoenix to run our state universities? Oh, that's right, the U of Phoenix is closing campuses left and right. Thankfully their students can go to the still open public universities. What about our K-12 students? What happens when the corporation that runs their school goes broke? Back to the severely underfunded public schools?
nowayjose
Fri, Dec 14, 2012 : 4:23 p.m.
I imagine Timothy slottow was doing this interview while stroking a hairless cat and a pinky raises to one corner of his mouth, ending each sentence with a evil laugh. Was I in the ballpark Kellie?
LXIX
Fri, Dec 14, 2012 : 10:45 p.m.
Ah yes. The infamous Number One from SPECTRE. Ever stroking Mr, Bigglesworth. Or sometimes petting his Turkish Angora. Honest Blowhard. Earnest Bluefullofit. Earnsa Billfold. Thats him all right.
Stephen Landes
Fri, Dec 14, 2012 : 4:41 p.m.
I regret I have only one vote to give for this comment.
Nicholas Urfe
Fri, Dec 14, 2012 : 3:31 p.m.
It is sprawl, with no regard for the community. Given their tax free status, Umich needs to put some effort into better managing their community relations and footprint. Their current strategy is "could not care less". The notion that "A2 would not be anything without the U" does not justify the anything goes, short term mentality of recent years. If A2 wants to bring them to the table, they should start discussing an income tax on the highest wage earning University employees.
Napalm.Morning
Fri, Dec 14, 2012 : 3:11 p.m.
The true overlooked tragedy, here, is that I do not own property that the U would be interested in buying.
LXIX
Fri, Dec 14, 2012 : 5:53 p.m.
If you are a Michigander, don't you already own the UM property?
eze
Fri, Dec 14, 2012 : 3:03 p.m.
So they have no long term plan other than to continue to demolish Ann Arbor landmarks for no particular purpose other than to put up parking lots that they can charge for blue lot permits. This comes on the heels of the announcement to destroy Arthur Miller's house, not to mention the complete destruction of the Maiden Lane neighborhood.
Paul Wiener
Fri, Dec 14, 2012 : 2:53 p.m.
It's always amazing to see that some people can make statements like this without the slightest consciousness of how much it displays shame, insensitivity, absurdity and greed.
sultanofswing
Sat, Dec 15, 2012 : 1:59 a.m.
It's good to be king.
Buckybeaver
Fri, Dec 14, 2012 : 2:25 p.m.
Perhaps any new building on that property could include space for the restuaraunt as a store front incased in it. It has a pretty small footprint itself. Lease it out.
Borisgoodenough
Fri, Dec 14, 2012 : 2:13 p.m.
If I had the right to do whatever I decided was in my own interests and totally ignore that I'm part of a larger community, it would "make so much sense" for me to build right up to my property line, ignore height and size restrictions, and do all sorts of things likely to endear me to my neighbors. In fact, over time I might even come to think and speak in terms like those.
Matt A
Fri, Dec 14, 2012 : 1:57 p.m.
Sorry to have to be the voice of reason here, but the owner of the property didn't have to sell. So, instead of being irritated (again) by U-M, be irritated about someone choosing to financially benefit from their property at the expense of the City's property tax income.
LXIX
Fri, Dec 14, 2012 : 5:49 p.m.
So, without the UM there could be no real estate market in Ann Arbor? Wow! The owners would be stuck with a worthless property in a greedy-investor-made bubble busted market. That is outrageous! Who trains those bent B-School brains to think like that, anyway?
rm1
Fri, Dec 14, 2012 : 3:14 p.m.
She had the right to sell. She is, I understand, the widow of the founder and longtime owner of Blimpy, and presumably an older woman. It is certainly understandable that she might want to diversify her nest egg out of relatively illiquid real estate into cash. And who claims the authority to say she doesn't have that right? Especially silly, when Blimpy will likely have no trouble relocating and carrying on.
Borisgoodenough
Fri, Dec 14, 2012 : 2:50 p.m.
Of course you are right about the seller, Matt. But there's another issue: if only one potential buyer doesn't pay property taxes and can ignore zoning and building regulations that apply to others, that can make the property worth much more to that buyer than anyone else might be willing to pay. This distorts the playing field and justifies that buyer offering a much higher price to obtain the building for their purposes.
Kai Petainen
Fri, Dec 14, 2012 : 1:45 p.m.
speaking as myself and not on behalf of the school, this deal makes sense. i'm glad that the owners weren't ripped off. it was a great location and if they got ripped off, then it would look bad. also, strategically.... just look at the map... it makes perfect sense that michigan got it. congrats to the owners! from a business perspective... there is also more competition against blimpy.... red robin, five guys... i think its good timing
Stephen Landes
Fri, Dec 14, 2012 : 4:40 p.m.
The food chains you mention are not competition for Blimpy's. You can't compete with "unique" by being "generic".
eze
Fri, Dec 14, 2012 : 3:04 p.m.
Yes, because Red Robin is what makes Ann Arbor so unique.
golfer
Fri, Dec 14, 2012 : 1:37 p.m.
bull you got so many properites that are not fully used. buy buy and have no taxes to pay. i think someone should sit down and list each building and rate it by usage. surprise is the out come. this has been going on a long time. one mil for a hamburger is way to much in these times.
DH
Fri, Dec 14, 2012 : 2:53 p.m.
There is a regular space survey and it is public information.
Brad
Fri, Dec 14, 2012 : 1:31 p.m.
Can we get a "greater good" comment from Jim Kosteva? That's all that's missing here.
Brad
Fri, Dec 14, 2012 : 1:26 p.m.
Dear UofM CFO, We, the citizens of Ann Arbor, want to let you know that we are oh-so-happy that we can contribute to your plan that makes "so much sense". For you. Signed, People that you wish would just move somewhere else
LXIX
Fri, Dec 14, 2012 : 5:10 p.m.
That is so true. After the University moves back home - to Detroit - Ann Arbor will have to scrape by on its own middle intellect. Nobody will want to live here with those thousands of extra acres, empty highrises and parks. Who will be able to stand the loss of car, moped, and clueless pedestrian congestion. An empty stadium no longer hosting "Its all about the money from the East Coast". Maybe just a few poor charity runs instead. Foreign customs, foods, and investment all gone, chasing after the revolving UM door.. Shocking news discoveries, shady ethics, drunken nightlife and false police reports vanished. No more dinosaur displays or equally archaic leadership decrees or visions. Hospital care now left in the shaky hands of poor old St. Joe. Big Pharma without a local pusher. OMG, it is too much! I can't stop laughing.
DH
Fri, Dec 14, 2012 : 2:56 p.m.
Be careful what you ask for. It is very easy to complain about the issues and disregard (or not even care to look into) the benefits.
Brad
Fri, Dec 14, 2012 : 2:43 p.m.
Yeah, and Ann Arbor minus the UM and plus the Pacific Ocean and constant temps in the 70s would look like San Diego. But that isn't reality either. What is reality is that our taxable land is being bought up by a nontaxable entity and I think people are entitled to question whether the university is upholding their end of the "good neighbor" arrangement.
cmadler
Fri, Dec 14, 2012 : 1:57 p.m.
Brad, The population of Ann Arbor in the 2010 census was just shy of 114,000. U-M has nearly 43,000 students and about 30,000 employees. Obviously not all the students and employees live in Ann Arbor (though nearly all of them at least live in the area and contribute to the local economy), but by the time you remove U-M residents, and then add in the departure of family members and of business that largely rely on the university, you'd be left with a city of less than 40,000 people -- possibly much less. In other words, Ann Arbor minus U-M probably looks a lot like Bay City or Jackson.
LXIX
Fri, Dec 14, 2012 : 1:19 p.m.
"U-M Chief Financial Officer Timothy Slottow said the properties offer the school's downtown campus a chance to expand its footprint. Central campus, he said, is significantly crunched for space." Gee Mr. Slottow, now why do you suppose the U is crunched for space? Could it be that your globalized economics and new overpopulated world order doesn't all fit into the same U space any more? Or your brilliant architects of humanity's future (gowny brains) haven't got a clue as to what to do about it? Hint - it is not called sprawl anymore. Not even density development. The solution is called sustainability. That means maintaining and preferably improving upon what you already have. 'Regent Andrea Fischer Newman said she "didn't get that much blowback" on the purchase initially. "I think there was sort of an 'Aw, I love Blimpy Burger'" feeling, she said.' Who are these people?
LXIX
Fri, Dec 14, 2012 : 4:30 p.m.
Wait until the end of the movie. It will be just like a Pure Michigan Difference From Reality campaign complete with the few remaing global investors singing for food in their 507,501 seat stadium. Maybe the homeless living there will throw them a Blimpy or two.
Bonsai
Fri, Dec 14, 2012 : 4:12 p.m.
the U-M's globalized economics and overpopulated world order? Who are you?
ordmad
Fri, Dec 14, 2012 : 2:51 p.m.
This feels like a bad conspiracy movie. Consistent at least.
Unusual Suspect
Fri, Dec 14, 2012 : 1:14 p.m.
"Purchasing Blimpy Burger property 'makes so much sense' for school's long-term plan" Meh.
Tom Whitaker
Fri, Dec 14, 2012 : 6:15 p.m.
Must be a new plan because there is nothing about this property in the UM master plans that are currently posted on its website.
oldlocal
Fri, Dec 14, 2012 : 1:04 p.m.
In the dark days to come, when my grandchildren trudge through the slush in University City, and grab a University Burger--with, maybe, a Coke--I'll whip this Blimpy Burger picture out of my pocket, and try to explain to them how, once upon a time, moms and pops made and sold their own food, and it was unimaginably good.
DennisP
Fri, Dec 14, 2012 : 3:13 p.m.
The correct name is "M-ville." Bank at the "M-Bank", shop at "M-acres", go to the "M-odeon" for a movie, eat at "M-donald's". Everything Michigan except for the people who work or attend who will come from out-of-state...
Homeland Conspiracy
Fri, Dec 14, 2012 : 1:34 p.m.
There's no way the uofm would let their city be called University City. They would call it U OF M CITY & serve U OF M BURGERS! NO townies or no dogs allowed.
Fat Bill
Fri, Dec 14, 2012 : 12:46 p.m.
Until UM actually has a project to build on the site, why not keep extending the lease(s) on a yearly basis?
sultanofswing
Sat, Dec 15, 2012 : 1:49 a.m.
Dude ... There is a project....lighten up on the kool aid
Tom Whitaker
Fri, Dec 14, 2012 : 6:14 p.m.
Because they will tear these buildings down and put in a temporary surface parking lot--they don't like top play landlord. This is the status quo. Instead of providing housing or larger-scale commuter options (like dedicated buses), UM builds more and more parking for out-of-town staff. This, while touting their "sustainability" initiatives. Planet Blue - = Planet Asphalt.
conundrummy
Fri, Dec 14, 2012 : 12:15 p.m.
There needs to be a master plan for the city that states what are the limits of the universities ability to own property tax free. Because the blimp is so well know, has such a huge following, and already is in the downtown zone they shouldn't have an issue with the rents that other restaurants are paying or what the should have been paying. Hopefully the deal will allow for them to have a smooth transition. The first snow fall there should be a blitz of snow polar bears.
johnnya2
Fri, Dec 14, 2012 : 2:20 p.m.
The rent issue is a non-issue. His lease was set to expire in the spring. Shoudl he be allowed to pay under market rates BECAUSE he is Blimpy Burger? He could not afford to buy the property, which he could have done years ago. The U needs more space, the former landlord had the property and they struck a deal. If you don;t like it, but it yourself
HB11
Fri, Dec 14, 2012 : 12:42 p.m.
The city cannot establish limits for UM, as the U is an arm of the State of MI.
BikerMatt
Fri, Dec 14, 2012 : 12:12 p.m.
The headline and upper photo caption need to be reconsidered. The University is not buying Blimpy Burger. It is buying the property Blimpy Burger occupies. Patricia Shafer owns the property, not the business.
Kellie Woodhouse
Fri, Dec 14, 2012 : 12:22 p.m.
You're right. I've added 'property' to both so as not to be misleading. Thanks!
smokeblwr
Fri, Dec 14, 2012 : 11:42 a.m.
So if the footprint keeps expanding and more property goes off the city tax roll how does this benefit Ann Arbor? UM's wages for staff that are not doctors/professors/coaches/social media directors is typically so low that the employees can't afford to live here, so it is not bringing new residents into the city. Should Ann Arbor start a special income tax on UM employees?
snapshot
Mon, Dec 17, 2012 : 5:48 a.m.
A city income tax would allow all employees to contribute to the city services they use and use up rather than being supported by city property owners that pay property taxes. 40% of properties in A2 are exempt from taxes yet some 50,000 commuters use up the roads, sidewalks, enjoy the amenities and services paid for by property owners. A city income tax would also provide a 6 mill relief on property tax bills. It's a fairer tax system.
Macabre Sunset
Fri, Dec 14, 2012 : 10:25 p.m.
You're free to live in a city that does not have one of the top 20 universities in the world and the hundreds of businesses, small and large, that Michigan attracts.
smokeblwr
Fri, Dec 14, 2012 : 6:42 p.m.
That is my point. AA residents are all paying a "seat license" in the form of our taxes to own a house in this city due to UM gobbling up all taxable property.
An Arborigine
Fri, Dec 14, 2012 : 5:10 p.m.
Nice idea, but I'm sure the city would be "forced" to extend the tax to all Ann Arborites. Be careful what we wish for!
johnnya2
Fri, Dec 14, 2012 : 2:17 p.m.
How does it help Ann Arbor? Well lets see, more employees who live and work int he area and spend money. Does Blimpy Burger even come into existence without the U? I doubt it survives a month if it opened in Saline or Dexter. Blimpy Burger is only famous BECAUSE of the U. Having a U that spends money in the community is also a good thing. It keeps people employed. It provides parking revenue. I know a LOT of people who work for the U and live in A2.
clownfish
Fri, Dec 14, 2012 : 2:03 p.m.
This goes against everything the TP has been telling us for years. They say the public employees at all levels are greedy and overpaid. Which is it?
dancinginmysoul
Fri, Dec 14, 2012 : 11:25 a.m.
Does U of M really need to expand its footprint?
sultanofswing
Sat, Dec 15, 2012 : 2:14 a.m.
Never been "big footed " ?
An Arborigine
Fri, Dec 14, 2012 : 5:08 p.m.
How else will our taxes go up?
DH
Fri, Dec 14, 2012 : 3:02 p.m.
Well, I guess that depends. Space utilization is studied every year by the University and decisions are not made in a vacuum. This purchase must have made sense for both parties involved.
golfer
Fri, Dec 14, 2012 : 1:38 p.m.
no!