Ann Arbor Policy on City Land Sale Proceeds

This timeline includes changes to the city of Ann Arbor’s policy on how the proceeds of sale of city land are used.

April 15, 1996: City council establishes a policy that put half of the proceeds from city-owned land sales into the affordable housing trust fund. The minutes of the meeting show that Jane Lumm (Ward 2) voted against an amendment, made at the council table, to divide the proceeds of land sales (less costs) between “infrastructure needs and the housing trust fund regardless of budget year.” But the minutes show that the vote on the amended resolution was declared unanimous on a voice vote (not a roll call). In 1996, part of the impetus for consideration of a land sale policy was driven by city-owned property at Packard and Main, which eventually became a part of the Ashley Mews development.
Nov. 5, 1998: City council votes to increase the portion of proceeds of city-owned land sales that would be earmarked for the affordable housing trust fund – from half to all. Lumm joined her Ward 2 colleague David Kwan in voting against this policy shift.
Dec. 8, 2003: City council approves purchase of Y property – on William Street between Fourth and Fifth avenues – for $3.5 million, financing the purchase with a five-year loan. The Ann Arbor DDA had agreed to pay some of the interest on that loan through an action taken not by its full board, but rather by its executive committee, on Dec. 5, 2003.
Oct. 20, 2005: Pipe bursts in YMCA building, displacing residents. The building is ultimately determined to be not worth the cost of renovation.
June 4, 2007: City council votes to rescind the policy that put the proceeds from the sale of city-owned land into the affordable housing trust fund. The policy shift in 2007 took place as part of a relatively small land transaction: The city was selling a piece of land on East Eisenhower for $23,750. The proceeds were earmarked for the construction fund of the new municipal center, built at the corner of Fifth and Huron. But in order to put the money from the sale into that construction fund, the council needed to change the existing policy on land sales. So one of the “resolved” clauses in the resolution was the following:

RESOLVED, That City Council revoke Resolution R-481-11-98 which provided that the proceeds from the sale of excess City property be deposited into the Affordable Housing Trust Fund;

In the course of deliberations, the council agreed to amend the resolution so that the $23,750 in proceeds from this particular land sale would still be deposited in the affordable housing trust fund – but left the basic policy change intact. The council had an eye toward changing the policy anyway – so that the roughly $3 million in proceeds of the sale of the First & Washington parcel (to Village Green for construction of the City Apartments project) could be put toward the new police/courts building.
Dec. 1, 2008: City council authorizes five-year extension of the renewal on terms from the Bank of Ann Arbor to finance the Y lot loan. During deliberations, some of the focus is on the need to divest the city of the property. Sandi Smith (Ward 1), at her second meeting after winning election to the council a month earlier, put the interest payments in the context of the cost of supporting a homeless person:

In deliberations, councilmember Sandi Smith said that she would support the continued financing of the property, because they had no other choice, but that she urged her colleagues to begin thinking of master planning the area so that the city could divest itself of the property as soon as possible. [The master planning of the area was eventually realized in the form of the Connecting William Street project.] Smith noted that given the $5,000 cost of supporting a homeless person, the interest-only payments could be used to support 27 people. The math goes like this: ($3,500,000)*(.0389)/5,000.
Sept. 19, 2011: City council approves the sale of a strip of the former Y lot for $90,000 to facilitate construction of new Blake Transit Center by the Ann Arbor Area Transportation Authority. The total parcel area of the strip was 792 square feet.
April 26, 2012: Board of the AAATA approves the purchase of a strip of the former Y lot for $90,000 to facilitate construction of new Blake Transit Center.
Sept. 5, 2012: DDA board passes a resolution urging the city council to dedicate proceeds of the sale of city land to support affordable housing.
Sept. 5, 2012: Washtenaw County board of commissioners passes a resolution urging the city council to dedicate proceeds of the sale of city land to support affordable housing. [At the time, county commissioner Leah Gunn served on the DDA board, along with former county administrator Bob Guenzel, who continues to serve on the board.]
Sept. 17, 2012: City council considers but postpones action on a policy for proceeds of the sale of city-owned land.
Oct. 15, 2012: City council approves a policy that ultimately leaves the policy on the use of proceeds of city land to case-by-case decisions, but indicates that for the Y lot, the proceeds will:

… first be utilized to repay the various funds that expended resources on the property, including but not limited to due diligence, closing of the site and relocation and support of its previous tenants, after which any remaining proceeds be allocated and distributed to the Affordable Housing Trust Fund;”
Nov. 8, 2012: City council transfers $90,000 from proceeds of the land sale to AAATA into the affordable housing trust fund.
March 4, 2013: City council directs the city administrator to select a broker for the Y lot.
July 3, 2013: City administrator Steve Powers announces that he’s selected Colliers International and local broker Jim Chaconas to handle the marketing of the property.
Nov. 18, 2013: City council approves the sale of the former Y lot for $5.25 million to Dennis Dahlmann.
Dec. 4, 2013: DDA board waives its claim to reimbursement from the sale of the Y lot.