Council Delays Edwards Brothers Decision

The Ann Arbor city council has again postponed a vote on its right of first refusal to purchase a 16.7-acre piece of property from Edwards Brothers Malloy, located at 2500-2550 South State Street. The University of Michigan has offered $12.8 million for the land.

The council will next take up the question at a special session on Feb. 24, 2014, which will also possibly feature a closed session.

The council voted to postpone the question at its Feb. 18, 2014 meeting after a closed session that lasted about 25 minutes. The resolution delayed by the council 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. Some background information on the possible acquisition of the property by the city was released earlier in the day. [Edwards Brothers chart][Additional offer for Edwards Brothers 2-18-14] [Memo to council]

The council had on Feb. 3 postponed the item “to our next meeting” – which was scheduled for Feb. 18. But subsequently a special meeting was called for Feb. 10 to consider the question. That special meeting was then cancelled.

Earlier, 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.

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.

An item authorizing the $12.8 million purchase is on the Feb. 20 UM board of regents agenda, based on the assumption so that the university can move ahead if the city doesn’t exercise its right of first refusal.

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 right-of-first-refusal window of 60 business days is a formal notification to the city by Edwards Brothers, which was made on Nov. 27, 2013. According to a staff memo from city administrator Steve Powers, the city has until Feb. 26, 2014 to exercise its right of first refusal. If the city decides to exercise that right, it must close on the purchase by Feb. 28, 2014.

This brief was filed from the city council’s chambers on the second floor of city hall located at 301 E. Huron.