The desire of the AATA to acquire the six-foot strip has been mentioned at several AATA board meetings during routine updates. It’s part of the AATA’s plan to reconstruct the BTC on the South Fifth Avenue side of the block; the BTC currently stands on the South Fourth Avenue side, with a canopy that stretches towards Fifth. The AATA hope to finalize the design of the new transit center by the end of December 2011, with construction to start in early 2012.

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]

The building that formerly housed The Ann Arbor News, at the southwest corner of Huron and Division.

However, the three-story News building is only one of several properties being considered as a potential home for the credit union’s administrative offices, says Jeff Schillag, the institution’s vice president of marketing and community relations.

Not all the potential sites are downtown, Schillag says. And any acquired space would replace leased office space.

Opened in 1936, the Albert Kahn-designed News building was shuttered last July when Advance Publications closed the daily newspaper.

A two-story press remains in the 80,000-square-foot building. The property also includes on-site parking, with entrances off of both Washington and Huron, and an additional parking lot on Ann Street. The building was renovated in 2004-05.

As part of its investigation into the property, the credit union retained Atwell-Hicks to take soil samples at The News building last week, Schillag says. Boring equipment in the parking lot was visible to passers-by as the engineers did that work, and prompted The Chronicle to follow up.

Pavement in the parking lot of the former Ann Arbor News building shows remnants of work done last week by Atwell-Hicks.

Schillag emphasized that the activity does not mean the credit union has decided to purchase the property.

Tax assessors put the 2009 value of The News building, at 340 E. Huron, at about $10 million and the lot at 336 E. Ann St. at about $600,000. The News building occupies the width of a block, with frontage on West Washington as well as Huron Street. The properties went on the market in October and are listed with Colliers International, with an asking price of $9.3 million.

In January, Swisher Commercial reported a vacancy rate of 17.6% in Ann Arbor’s office market. The rate for the downtown area was 16.5%, or 288,223 square feet.

The privately held Advance Publications Inc. bought The News – along with the Grand Rapids Press, Flint Journal and several other Michigan papers – in 1976.

Last year, the company reduced the number of publication days at the Journal and a number of the other Michigan papers. It also closed The News – in its place, the company launched a new enterprise, AnnArbor.com, which publishes online and offers print editions twice a week.

The UM Credit Union operates six branches in Ann Arbor, plus a branch on UM’s Dearborn campus. Its main downtown Ann Arbor office is next to the Ann Arbor District Library, at 333 E. William.

The University of Michigan Credit Union building on East William. The view is to the northwest. Behind the building, at the top of this photo, is the top of a crane being used on construction of the Fifth Avenue underground parking structure.

Longtime Ann Arbor resident Metta Lansdale was recently hired as director of the Traverse Area District Library in Traverse City. Her first day on the job is today, Nov. 2. I talked to her on the teeter totter just before her move north.

We talked about a range of moving topics – the fact that she’s managed to sell her Ann Arbor house, how she found a place to live in Traverse City, her relationship to the Ann Arbor community, plus how she’s getting rid of the stuff she doesn’t want to move.

And some of that stuff includes books. I was keen to know how a librarian culls her own private collection.

In the mix of talk on the totter, there’s some brief discussion of the tools currently being used by a historic district study committee in Ann Arbor. That committee is examining an area in Ann Arbor south of William Street as a possible historic district, and will eventually make a recommendation to the Ann Arbor city council on that matter.

Sign at Fresh Seasons Market on West Liberty. (Photo by the writer.)

It’s hard to keep something under wraps when your landlord’s real estate agent puts a “For Lease” ad on the front page of the local newspaper. That ad ran last Thursday to solicit a new tenant for the building at 2281 W. Liberty, where Fresh Seasons Market has been located for about 20 years. And it prompted the grocery’s customers to ask: What’s up?

“We’re not signed, sealed and delivered yet,” said Fresh Seasons general manager Jan DeMunnik, referring to their new, undisclosed location, which she characterized as “very close” to the current store. They hadn’t planned to announce the move just yet, she said, but the real estate advertisement forced their hand.

Since then they’ve put a notice about the move on the sign outside their business, and are passing out flyers to customers that explain the situation – and to make sure people know that they are not closing.

Ben and Lynda Stahl bought the business 15 years ago from Gary Coleman, who still owns the building but lives out of state. They’ve been on a renewable five-year lease, which ends later this year. That made it a good time to look around for alternative space, DeMunnik said. Because of the economy, there are a lot of empty buildings and good deals, she explained.

They found a location with lower rent and in better condition, DeMunnik said. The space will allow them to keep their outdoor area as well – the market has a large garden section, selling annuals and perennials in season, and Christmas trees during November and December.

The Chronicle asked DeMunnik whether the new location might be the former CVS store about a block away, just east of Stadium on Liberty. That store has been empty since early 2008, when CVS moved to its new building at 2100 W. Stadium Blvd. The former Arbor Farms store, just north of Liberty on West Stadium Boulevard, is also vacant. So is the one-story commercial building at Liberty and First, next to Liberty Lofts condos. Earlier this year, that building was being looked at for a possible European-style indoor farmers market.

DeMunnik said she couldn’t comment on any speculation about the store’s future location. She said they’ll inform customers as soon as they can, saying it was difficult to know how soon that would be. They hope to move after the holidays, which is traditionally a slow time for the store, she said. But that depends on how things come together with the new landlord.

Because they were forced to reveal their plans to move, DeMunnik says they’re now using it as an opportunity to get feedback from customers about what changes they should make at the new location. Feedback forms haven’t yielded any concrete suggestions so far, she said, other than customers urging them to stay open – which they are.

“We won’t be any different,” DeMunnik said. “We just might look a little different.”

Jim Chaconas, an agent with Colliers International, is representing Coleman in trying to lease or possibly sell the 8,100-square-foot building where Fresh Seasons is now located. The building, on 1.5 acres, is listed for sale at $1.2 million. According to city records, the property’s state equalized value (SEV) is $591,900. Typically, market value is roughly double a property’s SEV.

The lease rate will depend on what changes prospective tenants want to make to the building, Chaconas said, but would likely be in the $12-$15 per-square-foot range, triple net (meaning that the tenant would also pay for taxes, insurance and maintenance).

The property is zoned C2B, or a “business service district.” From the city’s description of C2B zoning:

This district is designed to provide for certain types of commercial activities which have functional and economic relationships to a central business or fringe commercial district. Such activities will include wholesale suppliers, retail and supply warehouses, motor vehicle major repair and service agencies, carports and other parking establishments, equipment and machinery dealers, building materials dealers, food processing plants, farm and garden supply stores, places of entertainment or recreation, public utility facilities and retail establishments related in a peripheral manner to those of the Central Business District.

In this district the customer may come to the particular establishments either by automobile or as an extension of the CBD (Central Business District) pedestrian shopping activity. Since there is little essential interdependence of activities, each establishment can have its own automobile parking area. Good traffic accessibility is essential to this district, particularly for trucks and other freight carriers. The uses permitted, because of their required contact with auto and truck traffic, would be incompatible in the Central Business District.

Chaconas said the zoning allowed for great flexibility: “I can sell cars. I can sell fruit. I can put a restaurant there, if I want to.”

One prospective tenant is interested in putting another market in that spot, he said. Others who’ve expressed interest haven’t indicated how they’d use the building.

The lobby entrance to the McKinley Towne Centre building at 505 E. Liberty St. WCC officials had been considering vacant space in the building's lower level for a possible satellite campus. (Photo by the writer.)

Skyrocketing enrollment and an abundance of inexpensive Ann Arbor office space are among the factors prompting Washtenaw Community College officials to consider opening a downtown Ann Arbor campus.

For possible classrooms the administration had been contemplating up to 30,000 square feet in the lower level of a building on East Liberty owned by McKinley. Deans from the college visited the space recently, but on Tuesday WCC administrators decided to pull back from making a decision about that location, according to Stephen Gill, chair of the college’s board of trustees.

Instead, they’ll take the next six months to strategize, figuring out what their programatic needs might be, how much space they need and what kind of presence makes sense in Ann Arbor. WCC already offers satellite classes in Ypsilanti and Chelsea, but this would be the first time the 43-year-old institution would have a significant presence in downtown Ann Arbor.

The space available in the McKinley property – which until 1998 housed headquarters for the Borders Group bookstore chain – was being offered at a very good rate, Gill said. He declined to disclose the price, saying it would have depended on how much space they decided to lease, how much security they’d need and what kind of renovation would be required. Part of the space has been used this summer by entrepreneurs with TechArb – The Chronicle visited their subterranean digs in June.

Lower level space in McKinley Towne Centre is also accessible from East Washington Street. UM's English Language Institute has offices in the building, which is attached to a parking structure. (Photo by the writer.)

But that location might not end up being the spot WCC chooses, Gill told The Chronicle on Tuesday. “The reality is there’s a lot of inexpensive space downtown.”

There are also a lot of current WCC students in Ann Arbor. A recent demographic study indicated that close to a thousand WCC students live within a mile of the McKinley building on East Liberty, Gill said. It was also attractive because of its visibility – with an entrance off of one of downtown’s major streets – and the fact that it’s on an AATA bus line. Those factors will remain important when selecting a site. The idea is to give students more options, Gill said.

Opening an Ann Arbor satellite would also help WCC’s main campus. The availability of parking and classroom space there is already tight, and will become even more so this fall as enrollment is expected to jump between 10-20%, Gill said. According to the college’s website, nearly 20,000 students take classes for credit, and roughly 8,000 enroll in non-credit courses through WCC’s LifeLong Learning program. Downtown Ann Arbor is being considered primarily as a location to offer for-credit classes.

Gill said that in addition to WCC’s reputation as an educational institution, the economic downturn has been a key factor in the college’s increased enrollment. Courses are less expensive than those offered at Eastern Michigan University or the University of Michigan, but credits from WCC can be transferred to those institutions. [Not including fees, WCC tuition is $73 per credit hour for in-district students, and $124 for out-of-district students. EMU charges $238 for Michigan residents and $701 for non-residents, while UM's per-credit-hour tuition varies widely depending on the course of study, with a minimum of $450 for in-state students and $1,419 for students from out of state.]

WCC has also seen a spike in enrollment from people looking to change careers, Gill said. including former auto industry employees who’ve been laid off over the past few years.

News of WCC as a potential tenant comes on the heels of another possible shift in the occupancy of downtown Ann Arbor real estate. On Monday, the Ann Arbor Area Chamber of Commerce announced plans to try to sublet all or part of its 6,300-square-foot third-floor office in the Glazier Building at the corner of Main and Huron streets – a building owned by Dahlmann Properties. John Hansen, the chamber’s interim president, said they have too much space for their needs and would ideally move into smaller, less-expensive offices.

From right: At the counter of the county clerk's office on Main Street, senior clerk Susan Bracken Case reviews documents from UM's purchase of the Pfizer property, while chief deputy clerk Jim Dries, Liberty Title co-president Tom Richardson and Liberty Title vice president Matt Keir look on.

The momentous mixed with the mundane on Tuesday, as a phalanx of attorneys and real estate professionals converged on the Washtenaw County Clerk/Register of Deeds office to file paperwork for Pfizer’s sale of its Ann Arbor property to the University of Michigan.

Because documents for the sale of Chrysler’s Chelsea Proving Grounds were also filed that day in a separate transaction – a coincidence of timing – it marked the largest amount of transfer tax ever recorded in a single day for the county. Neither the purchase prices nor the taxes paid for those deals were disclosed. (See the end of this article for more information about how the real estate transfer tax works.) But for the Pfizer sale, the check received by the county was enough to make senior clerk Susan Bracken Case gasp, then grin.

We initially heard that the UM/Pfizer documents would be filed at 10 a.m., so we headed over to the clerk/register of deeds office at 200 N. Main to observe the occasion. Turns out we were a little off on the timing – in fact, the final transaction with the county didn’t occur until around 2 p.m. But we were able to return and bear witness to the event, as did a guy who happened to walk in at the same time to ask about a tax lien – wearing shorts and a T-shirt amid a cluster of suits and ties, he seemed momentarily unsure if he was in the right place.

Much of the heavy lifting had been completed prior to Tuesday, but we asked John Cameron, an attorney with Dickinson Wright (and outside counsel for the university in this transaction) to fill us in on the final steps taken to close the deal that day.

A small group of attorneys had gathered at 9 a.m. in the Fleming Administration Building at the office of Ciara Comerford, who is UM assistant general counsel and the point person for the university on this deal. For about 90 minutes, they went over final details of the transaction – ensuring that no last-minute problems had arisen, making sure the university’s insurance on the property was in order, checking to see that the billing for gas, electricity and other utilities had been transferred to UM.

They then authorized the university treasurer’s office to wire funds for the purchase to First American Title in Chicago, which was the closing agent for this deal. Though the attorneys and staff at the clerk’s office would not disclose the purchase price, university officials previously have said they planned to pay $108 million for the 174-acre site on Plymouth Road, located near UM’s north campus and medical complex.

Liberty Title on Main Street, where some of the action took place Tuesday in closing the real estate deal between Pfizer and UM.

The attorneys waited until they’d received word that the transfer was verified – they’d been given a federal reference number as a way to track it in case problems arose, but none did – then they packed up their briefcases and headed over to Liberty Title, on Main Street just a block away from the county administration offices.

Liberty Title was the local agent for First American Title – Tom Richardson, Liberty Title’s co-president, said somewhat ruefully that they were not providing title insurance, which presumably would have meant a little more coin for his firm. Rather, they worked with the attorneys to review all the closing documents, a process which included making some minor changes and faxing papers back and forth between Liberty Title and First American Title, Cameron said. They checked to make sure each of the 20 or so documents were properly signed and notarized, and made a brief trip in the late morning to the clerk/register of deeds office to see if everything was in order from the county’s perspective.

At this point – and we’re not kidding – they called the university to send someone out to the property and verify that it was still standing and that all the property they’d agreed to purchase was there – including records and personal property, such as equipment. It was.

Back at the Liberty Title office, Cameron got on a conference call with the attorney representing Pfizer and the title insurance representative from First American Title. Each of them said something to the effect of “I’m authorizing you to close this transaction.”

Tom Richardson of Liberty Title, county clerk Larry Kestenbaum, attorney John Cameron and chief deputy clerk Jim Dries await the final document processing of UM's purchase of the Pfizer research campus.

With that, the escrow officer for First American Title broke the escrow account, which freed up funds to pay the deal’s broker their brokerage commission and to pay the transfer tax, among other fees. The official closing also meant that the group in Ann Arbor was now authorized to record the documents with the county, so they crossed the street to the county administration offices. They got a tax certificate from the treasurer’s office – verifying that there were no back taxes owed on the property – then brought all the documents to the clerk/register of deeds, where the paperwork was recorded. The attorneys received time-stamped copies of the documents – the originals will be scanned into the county’s database and returned to them in a few days.

When Cameron concluded his description of the day, he said: “And now we’re going out to lunch. We’re done.”

It was a bit anti-climactic, in fact. Comerford of UM’s general counsel said there’d likely be some kind of celebration at the Pfizer site later in the day by the staff of the Medical School, which is paying more than $60 million of the purchase price and is taking the lead in determining how to use the space.

Some staff from the office of Hank Baier, UM’s associate vice president for facilities and operations, would also be part of whatever celebration ensued – Baier’s staff was on hand Tuesday at the Pfizer site to take over the management of the buildings and property from local representatives of the drug company, Comerford said.

Coda: Real Estate Transfer Tax

While the county couldn’t disclose the purchase price or transfer tax paid on the Pfizer property, chief deputy clerk Jim Dries did give The Chronicle a mini-tutorial on how the tax is calculated, as well as some data about how much transfer tax the county has collected over the past 20 years.

The seller is responsible for paying the Michigan real estate transfer tax (RETT) for the sale of real property, such as land or buildings (as opposed to personal property, such as equipment, appliances, furniture or other items that can be moved). The county collects the tax when the property deeds are presented to the register of deeds office for recording after a sale has closed.

The state gets the largest portion of the RETT: For every $1,000 of a property’s sale price, the state gets $7.50 and the county gets $1.10. So if the $108 million cited by UM were the price only for real property (an unlikely but possible scenario), then the county would have received about $119,000 in RETT, with the state receiving $810,000.

Why wasn’t the purchase price disclosed? State law does require that the price for real property be disclosed to the government, but it can be done in one of two ways: 1) on the deed, which is a public record, or 2) on a real estate transfer valuation affidavit, which can be filed when the deed is presented for recording. If an affidavit is filed, that keeps the transaction price confidential. Often you’ll see a property’s purchase price recorded as $1 on official public documents – that means an affidavit has been filed. Both major deals on Tuesday filed affidavits, so no information on the purchase prices was disclosed to the public.

But here’s some context: On Tuesday, the county collected RETT on 19 real property transactions, including the Chrysler and Pfizer deals. Gross receipts for transfer taxes on those 19 transactions totaled $1,053,551, including $918,498 in state RETT and $135,053 in county RETT.

The previous day (Monday, July 15), the county collected just $39,367 total, including $30,202 in state RETT and $9,164 in county RETT.

Overall, a drop in real estate prices and a slowdown in sales have resulted in a sharp drop in RETT revenue for the county, which peaked in 2005 at $2.54 million. Last year, RETT revenues fell slightly below $1.4 million. So far in 2009 (through July 16) RETT revenues are $482,300.

Finally, for data geeks among our readers, here’s a listing of county RETT revenue from 1988 through 2008:

-
1988 = $793,920
1989 = $795,316
1990 = $717,684
1991 = $738,481
1992 = $799,184
1993 = $896,369
1994 = $1,106,343
1995 = $1,057,454
1996 = $1,205,976
1997 = $1,449,923
1998 = $1,741,230
1999 = $1,834,796
2000 = $1,888,762
2001 = $1,878,522
2002 = $2,119,614
2003 = $2,238,317
2004 = $2,539,692
2005 = $2,542,227
2006 = $2,203,118
2007  = $1,844,344
2008 = $1,397,368

The sale of Pfizer's property to UM wasn't the only major deal to pass through the county clerk's office on Tuesday. This 700-page document outlines details of Chrysler's transfer of its Chelsea Proving Grounds to New Carco Acquisition LLC – the company that's now holding some of Chrysler's former assets following the automaker's merger with Fiat.

A Bluestone Realty sign is still on the former Ann Arbor Art Center building at 220 Felch St., but the building was sold last week to ICON Technologies.

When Rob Cleveland of ICON Technologies sent us a press release about his firm’s purchase of the Ann Arbor Art Center’s Felch Street property, we took the opportunity to get an update on the center’s plans for its main Liberty Street site.

We reported last year that the art center, like virtually all nonprofits, was struggling financially and faced a budget shortfall. Last August, with two weeks left in their fiscal year, they’d launched a “Close the Books in the Black Campaign” to raise $20,000. So how was the center faring financially now?

The sale of the Felch property – also known as the Art Factory – helps their financial outlook, said Marsha Chamberlin, the center’s CEO. (She spoke to us by phone from New York City, where she’s visiting her daughter this week.) Proceeds will be used to pay down debt and “put a little in the bank,” she said. Terms of the deal were not disclosed, but Chamberlin said they got “a very good price.” When the building went on the market in September, it was listed for $1.1 million.

ICON Technologies, an Ann Arbor-based online marketing agency with offices on South State Street, made an offer within a week of the listing. Environmental studies, working through requirements for an SBA loan and dealing with the due diligence of its lenders – especially in the wake of last fall’s nationwide financial meltdown – pushed back the closing. The final papers were signed on Feb. 20 just before 6 p.m., Chamberlin said.

The Ann Arbor Art Center building at 117 W. Liberty.

The building sale was part of a three-year plan to bring all of the center’s activities under one roof, and is unrelated to the center’s involvement in a proposal to redevelop the city-owned 415 W. Washington site. More on that later.

The center owns the downtown Ann Arbor building at 117 W. Liberty, which houses its offices, retail shop and galleries, as well as its drawing and painting studios. They’d bought the Felch Street building in the mid-1990s because they’d been renting studio space elsewhere and figured “if we’re going to put money into it, let’s at least own it,” Chamberlin said.

Over the years, their space needs changed. At 11,000 square feet, the Felch building was too large for the center’s needs, and they’d been renting out extra square footage to other tenants. In the past they’d also rented space at the Liberty Street location, though there aren’t any tenants there now. That gives them room to bring the ceramic and jewelry studios now at the Art Factory back to the main downtown site, Chamberlin said. The center’s staff is working with Rizzolo Brown & Novak Architects to do space planning and remodeling – they plan to vacate Felch by June 1.

The economy is affecting the Ann Arbor Art Center just as it’s affecting other arts and cultural groups, Chamberlin said. Membership is down 25% over the past two years. They now have about about 1,000 members – at their high point five years ago, that number was close to 2,700.

In other cases, there are some mixed signs. December sales for the gift shop were down, but this January sales exceeded the previous year. Fall registration for art center classes exceeded their expectations by 20%, she said, but dropped for the winter term. Community giving is down, but they’re about to announce the sponsorship of the center’s 100th anniversary this year with a “generous donation,” Chamberlin said.

Even so, at the end of December Chamberlin had to retool the budget based on a less optimistic forecast. They’ve been meeting those new numbers, she said, but “by the skin of our teeth.”

Despite those challenges, she described the sale of Felch and consolidation into 117 W. Liberty as a strategic reorganization, not a retrenchment. The changes will make the art center more of a hub for all their activities. “Everything we do will be a lot more visible,” she said.

As for the status of the 415 W. Washington project, “we wish we knew,” she said. The art center is the lead partner in a proposal to redevelop that site, and was one of three finalists selected by an advisory committee to city council. However, as previously reported in The Chronicle, the committee did not make a single recommendation, saying they liked elements from all three final proposals and asking the city to “refine” its RFP (request for proposal) and have the three finalists reapply under the new RFP. To date, the refined RFP has not yet been released, so the art center and others vying for this project are on hold.

Though they’ve worked on this project for more than three years, it’s just as well that there’s been a delay, said Chamberlin, because the Felch sale and the response to the economic climate have occupied the art center’s focus.