Ann Arbor city administrator Steve Powers will now negotiate a sales agreement with Dennis Dahlmann for the purchase of the city-owned property north of William Street between Fourth and Fifth avenues in downtown Ann Arbor. And for its Nov. 18, 2013 meeting, the city council expects to be presented a sales agreement on which it can vote.
That direction from the city council came at the council’s Nov. 7, 2013 meeting. Dahlmann has offered $5.25 million for the property, known as the Y lot. It had been listed at $4.2 million. [.pdf of Dahlmann offer 10.17.13]
The resolution was amended at the council meeting with changes proposed by Christopher Taylor (Ward 3) that are intended to help ensure that the property is developed, that the development is sufficiently dense and is energy efficient, among other considerations. [.pdf of Taylor's amendments]
If those negotiations are not successful, then the Nov. 7 council resolution directs the city administrator to negotiate with CA Ventures (Clark Street Holdings).
The memo accompanying the Nov. 7 resolution states:
The offers from Dennis Dahlmann and CA Ventures are the strongest (cash, no contingencies, sales agreement, close in 2013) of the five proposals. Differences between the two offers are slight, but may be significant to city council. Dahlmann is proposing a purchase price of $5,250,000. CA Ventures is proposing $5,150,000. Dahlmann is proposing to build to less than the maximum density allowed by D1 zoning. CA Ventures’ offer assumes the ability to build to the maximum density allowed by D1 zoning.
City sources had reported that Powers wouldn’t be altering his recommendation to negotiate first with Dahlmann, despite the fact that CA Ventures had increased its offer to $5.35 million – because that new offer was received after the deadline for offers, which was firm and clearly communicated to bidders.
The Nov. 7 resolution directs the city administrator to provide a purchase agreement for the property for the council’s consideration at its Nov. 18 meeting. That’s the first meeting of the newly constituted council, which will include one new member – Jack Eaton, who’ll replace Marcia Higgins as a Ward 4 representative. That purchase agreement is supposed to include protections against the property not being developed.
The Nov. 7 resolution was sponsored by mayor John Hieftje and Stephen Kunselman (Ward 3).
The city had hired Colliers International and local broker Jim Chaconas to handle the possible sale, as the city faces a $3.5 million balloon payment this year from the purchase loan it holds on that property. The city has owned the land for a decade. If the sale is not completed by the end of the year, when the balloon payment is due, Bank of Ann Arbor would, according to city sources, maintain the existing interest rate on the loan (3.89%) and extend it for up to a year to allow for the city to finalize a sale.
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.