Round One of Building Demolition Hearings

Ann Arbor building board of appeals meeting (Sept. 13, 2012): At its Feb. 21, 2012 meeting, the Ann Arbor city council established a $250,000 fund to pay upfront costs – if necessary – to undertake demolitions of dangerous buildings. And at its Aug. 9, 2012 meeting, the council authorized signing contracts with four different demolition companies to do the work on an as-needed basis.

That set the stage for the building board of appeals to hold a first set of four show-cause hearings earlier this month.

If the board finds that the property in question is a dangerous building under the city’s ordinance and Michigan’s building code, and orders the property demolished, then a property owner has 20 days to undertake the demolition or appeal the board’s ruling to the circuit court.

Because the city now has demolition companies under contract and the funds set aside to pay for upfront costs, it can back up the demolition order if a property owner fails to comply with it – by going ahead and taking the building down. Although the city would pay the initial cost, the property owner would be assessed and invoiced for the cost of the demolition, which includes an administrative fee.

So it’s more cost-effective for property owners to demolish buildings themselves, compared to having the city do the work. When the owner of one of the four condemned properties arrived late a few minutes after the Sept. 13 hearings had concluded, Ann Arbor’s chief building official Ralph Welton told him: “We’d much rather you knock it down.”

That property was a residential garage, located at 2415 Dorchester Road in the southeastern quadrant of the city. The garage has apparently become a home to chicken hawks, which roost in the open roof.

The other three properties on the board’s agenda included two houses – one at 3123 Cherry Tree Lane, off Packard near US-23, which had additional construction done on the property in a non-compliant way, resulting in conditions the city found to be dangerous. The other house on the board’s agenda was 3010 Dexter Road, on the city’s west side.

In fairly straightforward fashion, the board found all three residential properties to be dangerous buildings under the local and state code, and called for their demolition.

The one property for which a representative of the owner was on hand was 175 N. Maple, where a former Chinese restaurant is located inside the Maple Village shopping center. That hearing took the longest of the four. The back-and-forth between the owner’s representative and the board resulted in a 30-day timeframe set by the board for a plan to be submitted to rectify the conditions, and subsequent to that plan approval, a 60-day window to effect the remedy. The owner’s representative came from Brixmor Property Group, a portfolio company of the Blackstone Group real estate fund.

It was evident that the board was handling the first round of show-cause hearings for the city’s recent efforts. To craft the wording of the board’s first motion of the meeting required a group effort, including much consultation with city attorney staff and Welton.

Building Code Background

The section of the Michigan Building Code cited by the board is Section 116.1, which reads in relevant part:

SECTION 116 EMERGENCY MEASURES 116.1 Imminent danger. When, in the opinion of the code official, there is imminent danger of failure or collapse of a building that endangers life, or when any building or part of a building has fallen and life is endangered by the occupation of the building, or when there is actual or potential danger to the building occupants or those in the proximity of any structure because of explosives, explosive fumes or vapors, or the presence of toxic fumes, gases, or materials, or operation of defective or dangerous equipment, the code official is hereby authorized and empowered to order and require the occupants to vacate the premises forthwith. The code official shall cause to be posted at each entrance to such structure a notice reading as follows: “This Structure Is Unsafe and Its Occupancy Has Been Prohibited by the Code Official.” It shall be unlawful for any person to enter such structure except for the purpose of securing the structure, making the required repairs, removing the hazardous condition, or of demolishing the same.

The city’s own ordinance describes the kind of show-cause hearings that formed the board’s business on Sept. 13:

If at the expiration of any time limit in the notice provided for in section 8:384(1) the owner has not complied with the requirements thereof, the planning and development services unit shall issue a notice and order to show cause to the owner of the building. The notice and order to show cause shall specify the conditions making the building or structure dangerous, the action necessary to alleviate the dangerous condition, and the time and place of a hearing on the condition of the building or structure. Notice shall be given to the owner in the same manner as provided in section 8:384(2). At the hearing, to be conducted by the building board of appeals, the owner shall have the opportunity to show cause why the building or structure should not be demolished or otherwise made safe as recommended by the planning and development services unit. At the same time that the owner is notified of the show cause proceedings, the planning and development services unit shall file a copy of said notice and order with the Register of Deeds for Washtenaw County.

Meet the Board

The board itself consists of Kenneth Winters, Paul Darling, Robert Hart, Roger Reik and Sam Callan. Reik and Callan were absent for the Sept. 13 meeting.

Board members on the five-member body serve 5-year terms. Each person must be a registered design professional with the following membership prescribed: a registered architect or builder or superintendent of building construction; someone with structural engineering or architectural experience; someone with mechanical or plumbing engineering experience; someone with electrical engineering experience; and one member with fire protection engineering experience.

Also present for the city was Ralph Welton, the city’s chief building official; Lisha Turner-Tolbert, who is projects and programs manager with the city of Ann Arbor’s rental housing division; Ira Harrison, representing the fire marshal; and Kristen Larcom from the city attorney’s office.

3010 Dexter Road

Ralph Welton led off by describing the property as a single-family home on the west side of town. It has been vacant since at least the beginning of 2006, he said. It’s missing basically all of its windows, and has tarps over the roof. And the roof, he added, is caving in. Most of the plaster and drywall inside is missing. He characterized the house as not only dilapidated but also dangerous. It was posted as uninhabitable about a year ago, he said. A letter was sent in November 2011 and it was determined that the owner is Barbara Wallis, who is now living in Palo Alto, California. The building department is recommending demolition of the property, he concluded.

Robert Hart got clarification from Welton that the property had been posted as uninhabitable year ago, but has been uninhabited for as long as six years. Welton indicated that it was being monitored as a vacant building prior to being posted. Kenneth Winters ventured that it’s not even possible to see the building from the street. Welton acknowledged that was true.

Welton noted that all the property owners on the agenda were notified by certified mail and first-class mail. Assistant city attorney Kristen Larcom indicated that the certified mail letter for the Dexter Road property had come back with a confirmed receipt from Palo Alto, and also a local address. Welton concluded that the property owner had been notified and had received the notification – but the city had received no follow-up contact from the property owner.

Winters asked other board members if they recalled how to handle an actual motion. The board’s discussion then centered around the question of whether the board simply needed to issue a finding that it was a dangerous building, or if it needed to go further than that.

Welton indicated that the motion needed to find the house was a dangerous building – with a recommendation for demolition. Board members wondered if they needed to cite the city ordinance and Michigan building code. Welton indicated they needed to qualify their finding by giving the reasons that he had listed out – that the building inspector had found the property to be in extreme disrepair, not limited to the following reasons.

Board members wondered if they needed to go through and recite that the building was posted on such-and-such a date, state that there was a letter of notification, and state that the building remains dilapidated and hazardous in violation of the city ordinance. Larcom indicated that an actual citation of the code was not necessary. But the motion did need to specify the findings, she said – based on having visited the premises, or based on photos in the information packet, or based on testimony by Welton. And the motion need to indicate why the board thinks that the structure does or does not qualify as a dangerous building, she added. Larcom indicated it would be sufficient to say “under the ordinance and building code.” Welton added that the structure had been damaged by deterioration and neglect, abandonment and vandalism. Part of the structure is likely to fall, he added.

Winters ventured that it would have been helpful to have had the packet before the meeting, so that board members could have visited each building and looked at them, and had time to go through the packet. Welton felt it would be possible to make the motion based on information in the packet and testimony of the building official.

Hart floated the following motion:

In the matter of item 2012-BSC-001, 3010 Dexter Road, I make a motion that in light of the evidence and testimony presented by the building official at this hearing of the order to show cause dated 8/28/12 that under the provisions of Section 116.1 of the 2009 Michigan Building Code and City ordinance 101 Dangerous Buildings, the structure in question, which has been abandoned for the better part of six years and was posted as uninhabitable on 8/25/2011 is warranted for demolition.

Winters wondered if it would be appropriate to go through and say that there are windowpanes missing. Larcom reiterated that the motion would need to be based on the board’s findings. Hart continued the motion by saying:

The motion is made in so far as it was presented to the board that the property was in extreme disrepair, including many missing windowpanes, tarps covering the roof, with exposed 2×4 stud walls inside the structure and vehicles in the rear yard, the building being in complete disrepair with additional vehicles abandoned and parked in the driveway hidden by shrubs. The property has not been maintained, and the property was posted as uninhabitable, and a letter of violation notice was sent to the property owner without response. Further to that point, the building remains in extremely debilitated condition and is a hazard to the public and is a violation of the aforementioned city ordinances and building code statute.

Outcome: The board unanimously approved a motion declaring that 3010 Dexter Road is a dangerous building and in need of demolition.

Larcom paused the board and indicated that the board’s motion needs to state the action that needs to be performed. That is, the board should say what needs to be done as a result of the finding that it is a dangerous building. Hart ventured that the motion already included that. With that assurance, Larcom was satisfied with the wording of the resolution.

Concluding remarks from Welton and the board indicated the city would now order the owner to demolish the house – with an option. If the owner does not demolish it, then the city will do it.

175 North Maple Road

Next up was a property in the Maple Village shopping center, also on the west side of town. Appearing on behalf of the owner was Martin Liles, a vice president for redevelopment with Brixmor Property Group, which is affiliated with the ownership of the shopping center. Liles asked to which address the city’s letters have been sent. Ralph Welton told him it was an office in Arizona. Lisha Turner-Tolbert, projects and programs manager with the city of Ann Arbor’s rental housing division, told Liles the specific address was PO Box 4900 in Scottsdale, Arizona. Liles asked if someone signed for it – no, she said.

Liles introduced himself as working locally out of Farmington, Mich. He told the board that he was shocked to see the written notice – and he’d become aware of it only through word-of-mouth. He told the board that he had on numerous occasions tried to contact the city’s planning manager, Wendy Rampson. He contended she had directed him to “hang tight,” and the building inspector would get back to him after the building inspector had gone through and reviewed the premises.

The site has been vacant for almost six years now, Liles said: “Our intentions are to redevelop it.” But unfortunately through the tough economic times of the last few years in the state of Michigan, he said, Brixmor has not found many individuals who were interested in the developing the property. He told board members he wanted to discuss what they were looking for – but he did not want to demolish the structure. If there’s something that can be done to cosmetically enhance it, that’s what he was hoping to hear that afternoon from the board.

Welton then went through the findings of the building department. The brick veneer is failing on two elevations, he said, and is falling away in some places in sheets. The roof structure is impaired by fire and is open to the elements. There have been several break-ins into the building, Welton continued. The building has been boarded up several times. The building has a compromised foundation, Welton said – and it’s unsafe and unsanitary.

Welton also described how the building gets used as a blind for companies dumping material, where it is out of sight from the rest of the shopping center. So the building department recommended demolition of the site, he concluded.

Turner-Tolbert added at that point that the city had also sent notification to an email address on file. Welton told Liles that as far as the city could tell, the property is not for lease or for sale. Liles told Welton it was, in fact, for lease, but not through a Realtor. He told Welton that Brixmor had created a couple of drawings for future development, which dated back to about a year and half ago. He described the new city ordinance mandating that a structure now must be within a certain distance of a property line – namely, within 25 feet. The existing structures are approximately 150 feet off the line. That’s been a very challenging footprint to try to lease out, he said. [Liles was referring to the city's new area, height and placement zoning regulations, which were given final approval by the city council at its Jan. 3, 2011 meeting.]

This was an issue that surfaced at several points in the back-and-forth between Liles and the board. Liles indicated that if the building were demolished, then new construction would need to comply with the 25-foot setback requirement of the new zoning regulations. So Brixmor was keen to keep the existing structure, which would not need to meet that requirement and was consistent with Brixmor’s hoped-for future development.

Brixmor intends to keep the existing structure up and expand that structure or build within the existing footprint, Liles told the board. He showed the board some drawings that Brixmor had been using to market the property to some different retailers. But the hardest challenge is to push the building to within 25 feet of the property line, he said. Brixmor is trying to maximize the lot and is showing anywhere from a 7,000 to 9,000- square-foot building – compared to the existing 3,000-square-foot building. Liles said there are a handful of retailers who would like the space. But Brixmor’s goal would be to build something with a 100% leased-out structure – not build something and hope that they could subsequently lease it out. The way the building sits today, the maximum visibility faces Maple Road, and that’s what the shopping center would like to achieve, he said. He felt that it would be possible to salvage some of the walls and the foundation of the existing building – that would be ideal.

Kenneth Winters wondered if the building could actually be rehabbed at this point. Liles assured Winters that whatever Brixmor turned over to a proposed retailer would be a solid structure. But Liles allowed that he could not say that 100% of the building as it stands now would remain. Winters ventured that the existing foundation might not be strong enough to bear the loads of a bigger building. Liles contended that the slab had proven itself and was not heaving and was not moving.

But Winters noted that some of the deterioration over the last six years was in the form of brick veneer falling off. He observed that this can come from two things – water from the top, or movement of the foundation. We don’t know which it is, Winters ventured. It could be the movement of the foundation, Winters contended – water getting under it and freezing.

Robert Hart was not interested in pursuing the issue of crossed letters and e-mails and the development difficulties: “How long have you guys actually owned the building?” More than 20 years was the answer. Hart told Liles that the question at hand was: “How did you let it get to this level of deterioration, and what are you going to do about it?” Liles reviewed some of the history of property – how it had been a ground lease with a Chinese restaurant that had previously occupied the premises. A fire occurred, and it took two years and a lawsuit – because Brixmor was going after the rent as well as damage to the building – for Brixmor to take back possession. Liles brought up again the difficulties in redeveloping and marketing the property.

Hart told Liles that the issue was not the marketing plan. Rather, it’s the condition of the building as it stands now, and what Brixmor’s intention is to rectify the situation. If there’s no intention or the wherewithal to correct the situation, then all it’s going to do is get worse, and not a lot of options exist, Hart feared. Liles allowed that was the point, and asked what Brixmor could do as an owner. Liles wondered if it were cost-worthy to go in and make repairs that have been identified. He told the board if there were, for example, a punch list of 10 items that Brixmor could complete in order to buy time, then that’s what he would like to do.

Winters wondered if all the exterior damage and roof damage that’s allowing water to get into the building could be taken care of – would the city then allow the owner to keep the building as it was repaired? Liles returned to the point that if Brixmor demolishes the building, it cannot rebuild the building the way it is today. Liles then showed the board an aerial photograph to make clear how the new area, height and placement zoning regulations would require that the building come within 25 feet of the property line. Liles noted that currently it’s more than 100 feet back because it was built prior to the current zoning ordinance.

Winters felt it did not seem to make sense that the city would require Brixmor to have a new building start within 25 feet from the roadway. Assistant city attorney Kristen Larcom was disinclined to weigh in, saying that would be a zoning issue. [In a phone interview with city planning manager Wendy Rampson, she confirmed for The Chronicle that if a currently non-conforming (grandfathered-in) structure were demolished, then new construction would need to comply with the new zoning regulations.]

Liles indicated that currently the building is grandfathered-in, and if the existing structure were to be removed and replaced, it would be required to fit the new guidelines. If Brixmor keeps the existing structure and works within that, the visibility to Maple Road would be maximized. He then presented the board with a drawing of what Brixmor would like to do. The drawing showed a 7,000-square-foot building. It would maximize both visibility and the parking field – and that’s what retailers want, he said.

Hart responded that with all due respect to the presentation materials, he did not think it was relevant to the issue. The issue is this: The building has deteriorated and it’s only going to get worse. “You’re basically being asked to rectify the problem … it’s going to put it onto us to make a determination whether the building should be allowed to remain standing.”

Liles then appeared to seek a kind of negotiation. He asked: If Brixmor were to demolish the building, would the city allow the existing structure to be rebuilt in the same location? Would there be a way Brixmor could get grandfathered-in again? Larcom responded to Liles by telling him this was a question he would need to ask his own attorney.

Winters asked Liles why the city should continue to allow a dangerous building to exist. It’s for them as a board to decide: Are we going to give you some time to do the work that is spelled out here? The board could not give Brixmor a directive to perform specific repairs, he said. Brixmor had to take care of what’s been pointed out as dangerous, and the board might be able to allow a certain length of time to do that. After that time, if it’s not accomplished, then the city has the board’s permission to go ahead and demolish it.

This is the way Winters saw the board’s options: It’s for Brixmor to tell the city how it is going to take care of this within the length of time that the board might allow.

Paul Darling ventured that the board had another meeting the following month. In that time, he thought the owner could develop a plan for undertaking work to make the building safe. Welton countered by saying that he did not think the city wanted just to see the buildings sit secured for another five years. The city would always want to look at any proposed plan of action. But just because of financial reasons – that it did not happen to be the opportune time to either build or tear it down – Brixmor was asking the city to put up with the building that doesn’t meet the standards, Welton concluded.

Winters asked if it was possible for the board to require that the property be made secure – with a cyclone fence 20 feet high or whatever is needed around the property. Welton responded by saying that in his opinion, as the building official, what the city is looking for is at least a “white box” – something that can be moved into. The city is not looking for something that has simply been sealed up but is still the same eyesore, bringing down property values in the area, Welton said. At this point the dangers remain, and he did not think the property was fixable with a coat of paint or a little “shoeshine.” There has to be an effort to make it a viable building or to tear it down – because that’s what the state law says about dangerous buildings, Welton said. It needs to be made into an occupied the building or else demolished.

Liles said that occupy-able could simply mean a “cold shell.” Welton allowed it could be close to that. Liles again asked that a list be put together for repairs that were necessary. But Welton told Liles: “It’s not for us to design something – it’s for you to design and for us to approve.” Welton told Liles that what he’d been hearing so far was: “What is the least I have to do to keep you from tearing down this building?” But that’s not the question to be asked, Welton said. The question is: Can we have time to make this a viable building, or tear it down ourselves?

Liles responded by saying his goal was to do what the city of Ann Arbor would like him to do. If the city tells him to do repairs, then he would do them. He did not want to turn the building into an occupy-able premises, then have to tear down the structure six months later because a retail tenant wanted something different. Liles maintained: “I want to make y’all happy.” He felt that if city officials met with Brixmor out on the premises and did a walk-through with Brixmor’s general contractor on-site – and if things could be pointed out that needed to be fixed – it would be possible to assess whether it’s cost-efficient to make the repairs.

Winters told Liles that at this point, either the building is made occupy-able or the city will proceed to have it torn down. So if the owner does not tear it down, the city will, Winters said. Liles then asked about a possible timeframe. Welton ventured it would take at least 14 days to generate architectural drawings – which would be necessary to work on a commercial building. But Welton indicated that he felt it was simply an effort to delay what is inevitable. A better approach, he suggested, would have been to talk to the planning department about what is possible – a variance for something else – rather than just letting it sit for six years.

In the conversation he and Liles had earlier in the week, Welton contended that Liles had said Liles had never seen the building. Liles objected that he had, in fact, seen the building – back when he used to manage the shopping center. He may not have seen it recently, he allowed. Welton indicated he felt that Brixmor didn’t actually have any real plans for the building, but rather was waiting to see how things turned out. “Meanwhile, the city endures this,” Welton said. Liles responded by saying it’s a considerable amount of money to invest. But he allowed, “We’ve been sitting on our heels waiting for the right time – with what we see as a potential ‘out lot’ for a single-use tenet.” Ideally, Brixmor would like to have a ground lease where a tenant would come in and take the property “as is,” he said.

Liles asked what the board’s timeframe would be to have the building demolished – because he did not know if he could get architectural drawings done within two weeks. Welton told him the timeframe would be set by the board. Liles told Welton that as a public company, the owner would need to go out and get three bids and present them to a committee. He figured it would be a 30-day process, at least. Welton noted that if the board were to rule that the building had to be demolished, that would still give Brixmor 20 days to appeal. Making the buildings occupy-able, Welton ventured, is probably not a very economic proposition, judging by what he knows of the building. The whole structure has been weakened by fire, he noted.

Winters asked if Brixmor had an architect or engineer go through the damaged building and say what might be salvageable. Liles indicated that the company’s property management had done that, but he had not been involved in it. On a monthly or quarterly basis, all of the vacancies in all of the buildings are reviewed just for security purposes, he said. Hart wanted to know just for the record who actually owns the property: Is it Brixmor? Liles told him that Blackstone Group ultimately has the ownership.

Hart asked if there were legal issues preventing the undertaking of remedial work – besides the economic conditions. Liles indicated it was a quite lengthy process. The tenant leases had to be reviewed. Some leases call for notification, if any structure in the shopping center is to be removed. Lender approval would also be needed.

Hart felt like the owners potentially had the wherewithal to do something, so he put forward a motion that granted 30 days to consult with the building official and produce a specific action plan, with architectural drawings to remedy the deficiencies and dangerous conditions outlined in the show-cause order. It would be at least a “cold shell” potentially occupy-able structure. And the plan would need to be executed within 60 days of plan approval. A biweekly inspection program would also be required that would be implemented by Brixmor properties. The motion went on to describe how the existing building would be demolished if the plans were not presented or were not implemented on approval.

Hart said the intention of the motion is to give the owner 30 days to put together architectural drawings and the game plan to remedy all the problems that have been identified with the building. If the owner can do it and it’s approved by the city, then the owner gets 60 days to actually get it done. If the first 30-day requirement is not met, or the second 60-day requirement is not met, then the building will be torn down.

Liles ventured that all of that amounted to “Option One.” He suggested that Option Two would be for the owner simply to demolish it. If that were the option taken, he asked if there was anything more required than a demolition permit. Welton told him that utilities would need to be shut off, too.

Outcome: The motion giving a 30-day timeframe for plans and a 60-day timeframe for implementation was approved unanimously for the 175 N. Maple property.

2415 Dorchester Road

Ralph Welton ventured that for this property, owned by Brian Gast, the “pictures tell the story.” He described it as a garage with a hip roof and three of the four hips have opened up. Tony Derezinski from the city council had provided the building board with pictures of chicken hawks roosting there – so it’s become an aviary, Welton said.

The owner had been approached by mail and there is a tenant who currently occupies the house, he reported. The house is probably close to needing condemnation, Welton supposed, but is currently occupied. The garage, in any case, is obviously a danger, he said – because the roof is in danger of collapsing into the building. There’s also a very big hole in the back side of the building. Rather than allow the structure to sit as a liability to the city and as a danger to tenants in the house, the building department recommends the demolition of the garage, he said.

Lisha Turner-Tolbert indicated that someone signed the return receipt on certified mail and confirmed that the property had been posted. Paul Darling made the motion ordering demolition of the garage.

Outcome: The board unanimously approved the motion ordering demolition of the garage at 2415 Dorchester Road.

2415 Dorchester Road: Coda

Shortly after the building board of appeals meeting concluded, the property owner, Brian Gast, arrived in city council chambers where the show-cause hearings were held. He had the letter in hand that had been posted on his property. Welton told him that the hearing had just been held and that the garage had been approved for demolition.

Welton clarified to Gast that it was the garage, not the house, that was currently at issue – but made clear he felt like the house was also “headed down the same road.” He told Gast that the order coming out of the hearing that day would give him 20 days to undertake demolition himself or to appeal it to the courts if he felt the building should remain. “We’d much rather you knock it down,” Welton told Gast.

3123 Cherry Tree Lane

Ralph Welton reviewed some of the history of the property, owned by Byron Patrikakos, which goes back at least to the summer of 2007. The city noticed that the owner was trying to build an addition without permits. Eventually the owner was ticketed for that, Welton said. He characterized the completion of the work having taken place in a somewhat “clandestine” fashion, and then people moved into the house. At that point, the owner moved back to Greece, Welton reported. The owner would periodically call the housing department and had once called Welton as well, he said, in order to discuss complaints about the house.

Meanwhile Welton, said, there were people living in the house. He listed off a number a problems: holes that go through the wall right to the sidewalk; drains that run into the bathtub; human waste in the crawl space; dangerous wiring going through cold air returns; lights hung with no junction boxes. “Every room is a disaster waiting to happen,” Welton concluded. Because there were people trying to live there, the city ordered the house evacuated, and the tenants left. The city’s housing department did an inspection and recommended condemnation, Welton said.

Lisha Turner-Tolbert added that the house and garage on the premises had been boarded up and padlocked. It was a nuisance property for the community, she said. Complaints have come from the neighbors – about drug activity and such. The police department had also recorded a lot of activity at that house. There had been no response to certified or for first-class mail sent by the city.

Paul Darling sought clarification about the garage: Was it detached or not? Welton noted that the city code does not allow for the existence of an accessory structure without the main structure being in place.

Outcome: The board voted unanimously to order demolition of the house and garage at 3123 Cherry Tree Lane.

Present: Kenneth Winters, Paul Darling, Robert Hart.

Absent: Roger Reik, Sam Callan.

Also present for the city was Ralph Welton, the city’s chief building official; Lisha Turner-Tolbert, who is projects and programs manager with the city of Ann Arbor’s rental housing division; Ira Harrison, representing the fire marshal; and Kristen Larcom from the city attorney’s office.

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