The Ann Arbor city council has delayed a vote on the purchase of the 16.7-acre Edwards Brothers Malloy property on South State Street. The University of Michigan made an offer to Edwards Brothers to purchase the property for $12.8 million, but the city council considered a resolution on Feb. 3, 2014 to exercise the city’s right of first refusal.
The vote was postponed until the council’s next regular meeting on Feb. 18. The vote to postpone was unanimous, and came after a roughly hour-and-forty-minute closed session. The council did not discuss the item before voting to postpone.
The resolution would approve the exercise of the city’s right of first refusal, appropriate necessary funds, and direct the city administrator to notify Edward Brothers Malloy about the exercise of the city’s right. The agenda item contained no other background information.
At its Jan. 6, 2014 meeting, the council had directed the city administrator and the city attorney to explore options and gather information about the Edwards Brothers land. The due date for that gathering of information was specified in the council’s resolution as Jan. 30 – the same day that the land-purchase item was added to the Feb. 3 agenda.
At its following meeting, on Jan. 21, 2014, the council approved without discussion a $25,550 contract with Atwell LLC for environmental site assessment services on the property. That assessment included a survey of asbestos-containing materials.
By way of background, the pending sale of the property to UM was announced in a Nov. 27, 2013 press release. The business – a fourth-generation Ann Arbor publishing and printing firm – had signaled its intent to put the property on the market in late July.
The city’s right of first refusal on the property was a condition of a tax abatement granted by the city council three years ago, on Jan. 18, 2011. Purchase by the university would remove the property from the tax rolls. Washtenaw County records show the taxable value of the property at just over $3 million. In 2013, Edwards Brothers paid a total of $182,213 in real property taxes, not all of which is the city’s levy. The total city levy of 16.45 mills on $3 million of taxable value works out to about $50,000.
According to the tax abatement agreement, the event triggering the city’s 60-day right-of-first-refusal window is a formal notification to the city by Edwards Brothers, which was made on Nov. 27, 2013. The council will still be within the 60-day window when it votes at its Feb. 18 meeting.
The resolution the council will be taking up again at its Feb. 18 meeting requires an eight-vote majority on the 11-member council – because the resolution changes the city budget and involves a purchase of real estate. Stephen Kunselman (Ward 3) was absent from the council’s Feb. 3 meeting – because he was attending a professional conference of the Association of Physical Plant Administrators (APPA). He works in the University of Michigan’s energy office as Planet Blue energy conservation liaison.
This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.