The city of Ann Arbor has taken a step toward putting the former YMCA parcel up for sale. The roughly 0.8 acre parcel at the corner of Fifth and William in downtown Ann Arbor is currently used as a surface parking lot in the city’s public parking system. The city purchased the property nearly 10 years ago, in 2003. At its March 4, 2013 meeting, the Ann Arbor city council voted to direct the city administrator to prepare an RFP (request for proposals) for brokerage services to sell the lot.
A similar proposal to start the process for selling the lot was considered at the council’s Aug. 20, 2012 meeting, but received the support of only three representatives on the 11-member council: Mike Anglin (Ward 5), Jane Lumm (Ward 2) and Stephen Kunselman (Ward 3). Some councilmembers were generally in favor of selling the lot, but called the effort premature, given a planning effort that was then underway. This time around the resolution was co-sponsored by mayor John Hieftje and the vote was nearly unanimous. The lone vote of dissent came from Christopher Taylor (Ward 3).
What’s changed since August 2012 also relates to a project the Ann Arbor Downtown Development Authority has been working on for almost two years, the Connecting William Street project, a planning effort that includes the former Y lot. The Connecting William Street project was undertaken by the DDA based on a directive from the city council, on a unanimous vote, given at its April 4, 2011 meeting. And at a Jan. 7, 2013 working session, the DDA gave a presentation to the council on its recommendations for future use of five city-owned parcels in the downtown area – the former Y lot, the Kline’s lot, the Palio lot, the Fourth and William parking structure, and the top of the Library Lane underground parking garage.
The city had used a loan to purchase the property from the YMCA for $3.5 million in 2003. The council voted in 2008 to extend a five-year loan with the Bank of Ann Arbor for another five years, through the end of 2013. The interest rate is 3.89%. The interest-only payments work out to roughly $140,000 a year. By the end of 2013, the total interest paid will be around $1.4 million.
A building on the site was condemned, and the cost of demolishing it and abating asbestos was around $1.5 million. The Ann Arbor DDA covered the demolition costs and has covered half of the interest payments. So the total amount of Ann Arbor governmental investment in the property is at least $6.4 million.
Revenue from the surface parking lot on the site – which charges a $1.40 hourly rate – amounts to $105-$140 per space per month for roughly 140 spaces. Over the last year, the lot has generated a rough average of around $20,000 per month. But usage has decreased since the opening of the new 711-space Library Lane underground garage, located across the street.
That parking revenue from the former Y site is collected by the Ann Arbor DDA, which operates the city’s public parking system under contract with the city. Under terms of that contract, the city receives 17
.5% of the gross parking system revenues. Also under terms of the contract, the DDA has the option to object to eliminating a facility from the parking system, within 30 days of notification by the city.
This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]