Low-Income Housing Project Planned

Also, Sigma Phi Epsilon aims to convert church into fraternity

Documents filed on Monday with the city of Ann Arbor’s planning staff show details of an affordable housing project at 1500 Pauline that includes tearing down the existing apartment buildings and rebuilding a combination of apartments, townhomes and a community center.

Apartments at 1500 Pauline

Entrance to the apartment complex at 1500 Pauline in Ann Arbor. (Photos by the writer.)

The project is being proposed by the Ann Arbor nonprofit Avalon Housing, though the property is still owned by the Washtenaw Affordable Housing Corp. Avalon took over operations of several WAHC properties, including 1500 Pauline, in 2009.

Also filing with the city on Monday was the Michigan Alpha Chapter of the Sigma Phi Epsilon fraternity, which is seeking a special exception use to transform the Memorial Christian Church building at the corner of Tappan and Hill into a fraternity house.

Avalon Housing: 1500 Pauline

In 2009, the nonprofit Avalon Housing took over operations for properties owned by the Washtenaw Affordable Housing Corp., including 1500 Pauline. The original intent was to rehab the four apartment buildings on the property, which is located on the north side of Pauline, between Seventh and West Stadium, next to Fritz Park. There are 47 apartments there, rented to federally subsidized low-income residents.

Financing for the originally planned rehab hinged on getting state tax credits from the Michigan State Housing Development Authority (MSHDA). But a MSHDA official toured the facility earlier this year and determined that several issues – including structural problems caused by deferred maintenance, drainage problems, poor barrier-free access and outdated layouts – made it unlikely that tax credits would be granted. The feeling was that it wasn’t worth additional investment, said Jennifer L. Hall, housing manager for the city of Ann Arbor/Washtenaw County office of community development, which has been working with Avalon on the project.

MSHDA indicated that they’d be more likely to provide tax credits to a newly constructed project. So Avalon now plans to tear down the existing buildings and redevelop the site into 32 units, including three-bedroom townhomes and one-, two- and three-bedroom apartments. The plan also calls for a community center on the site.

David Esau of Ann Arbor-based Cornerstone Design is the project’s architect. Cornerstone has worked on other projects with Avalon, including a renovation of Arbordale Apartments, a 39-unit complex that’s near the 1500 Pauline site.

Financing for the project is still being worked out, said Michael Appel, Avalon’s executive associate director, in a phone interview with The Chronicle on Monday. If the project gains approval from the city’s planning commission and city council, they hope to apply for a March 2011 round of state tax credits, he said, with the goal of starting construction in 2012. [Projects submitted on Monday will be reviewed by city staff over the next few weeks and would likely be scheduled for a vote by the city's planning commission at its Jan. 20, 2011 meeting.]

Hall said that Avalon also could apply for funding from the Washtenaw Urban County, which receives staff support from Hall and others in the office of community development. The Urban County is a consortium of 11 local governments, including Ann Arbor, that receives and allocates funding through a variety of U.S. Housing and Urban Development (HUD) programs, including the Community Development Block Grant (CDBG) and HOME Investment Partnerships. Those two programs provide funding for projects to benefit low- and moderate-income residents, focused on housing, human services and other community development efforts.

The Urban County has already committed funds to other Avalon projects, including the Near North housing project to be built on North Main between Kingsley and Summit. The Urban County has also been involved in the struggling Gateway Apartments, a low-income complex that – like 1500 Pauline – is owned by WAHC and now managed by Avalon.

Sigma Phi Epsilon Fraternity

The building at 730 Tappan – at the intersection of Tappan and Hill, across the street from the University of Michigan Ross School of Business – is home to the Memorial Christian Church (Disciples of Christ). The church is planning to sell the property to the Michigan Alpha Chapter of the Sigma Phi Epsilon fraternity. On Monday, the fraternity filed for a special exception use with the city – if granted, it would allow the building to be converted into a residence for the fraternity. The chapter is currently located nearby at 704 Hill St., on the southeast corner of Hill and State.

Memorial Christian Church in Ann Arbor

Memorial Christian Church (Disciples of Christ) at 730 Tappan in Ann Arbor, on the northwest corner of Hill and Tappan.

The application to the city for a special exception use states that no significant changes are planned for the building’s exterior. The site includes 19 parking spaces – the plan calls for adding 11 bike spaces in the basement of the building as well as 11 bike spaces outside. The interior of the three-level building would be remodeled into a residence with a maximum of 44 beds. (The chapter has over 100 members, but more than half live off-site.) The property is currently zoned R2B, a zoning category that allows for fraternities. The neighborhood includes many fraternities, sororities and student rental properties.

Jerry Mangona, president of the chapter’s alumni association, told The Chronicle they’ve been trying to find an appropriate site for the past five years – the current location was never intended to be permanent, he said.

The church site is ideal for two reasons, Mangona said. First is its location – next to the business school and a sorority (Delta Delta Delta, at 718 Tappan), and near Michigan Stadium. There’s also ample parking, he said, which is not the case at their current house. Secondly, the church structure itself is impressive, he said, both in terms of its history and architecture. The historic church was originally built on State Street – where the UM law quad is now located – and was moved to its current location in 1923. The renovation would include common areas, such as a formal dining room and possibly a lecture room. The chapter would be unique on campus, Mangona said – their goal is to be designated a residential learning community, dedicated to leadership development and continuing education for members and alumni.

Mangona declined to provide information regarding the purchase price or cost of renovations, saying only that renovations could reach the 7-figure range. Reached on Tuesday, Dr. Rev. Irwin Green, the church’s pastor, said he preferred not to comment on the sale at this time.

According to its summer 2010 newsletter, the church was negotiating a sale of the property for $1.4 million. Mangona confirmed that this was the church’s asking price at the time, but indicated it was not the final price. He said the closing of the deal will depend in part on whether they are granted a special exception use by the city, and on whether their architect determines that the interior renovations they’d like to make are feasible.

The church’s December 2010 newsletter indicates that plans for an upcoming move to a leased facility in Pittsfield Township – as well as a name change – are underway:

The work of gathering appropriate information for an appearance at the Pittsfield Township Board to request a property use permit, for the leased facility as a church, should be completed soon. We should be ready to announce our plans on storage and how the logics of storing some of our “stuff” will happen in the very near future. A celebration of who we have been and who we hope to be is being planned for January. We will take the leap toward a new name for the church. That will be a time for us to begin gathering our ancestors – the saints who over a span of 119 years have been part of building up and deepening this small faith community on Hill St and Tappan. We want to carry them with us as we wait and plan for our new church and to pray for their help.

And yet, a true community contains the living and the dead. God’s community of the faithful isn’t limited to only those we can see and share geography. The living have gifts to give too — looking back lacks the dimension and relevant context that leaning forward can bring. Both the living and the dead have something to say about the kind of church we want to be known as and for. Breathe deeply and rest assured that is as it should be too. God is with us on this extraordinary journey toward a new home.

Memorial Christian Church and UM Ross School of Business

The Memorial Christian Church is located across Tappan from the University of Michigan Ross School of Business.


  1. By Mary Morgan
    December 1, 2010 at 11:20 am | permalink

    I received this additional information from Avalon’s Michael Appel after the article was published:

    The total cost of the 1500 Pauline project is estimated at just over $8 million. Avalon expects sources to include Low Income Housing Tax Credits, HOME program subsidy (HUD funds allocated through MSHDA and the Washtenaw Urban County), the Federal Home Loan Bank, and private loan funds.

    The mix of units at the proposed complex are: 6 one-bedrooms, 14 two-bedrooms and 12 three-bedrooms.

  2. December 1, 2010 at 11:31 am | permalink

    What will happen to the current tenants? Will they be eligible for the new units?

  3. By Mary Morgan
    December 1, 2010 at 12:59 pm | permalink

    Re. current tenants: Michael Appel said they’d be working with the city/county office of community development to help tenants relocate when the time comes, following federally-mandated relocation guidelines. Yes, current tenants would be eligible for the new units, but there are a couple of other issues: 1) There will be fewer units in the new complex than there are now, so not everyone can be accommodated at the same location; and 2) It will likely take about a year to complete the project, from the time when the current buildings are demolished to the time that the new units are ready to occupy. If someone finds a new apartment elsewhere, they might not want to move again.

  4. By DrData
    December 1, 2010 at 4:00 pm | permalink

    That’s considerably fewer than what is in the current complex. I did “Get out the vote” on election day in 2008. That’s going to disrupt lots of tenants and could even make a difference to the enrollment figures for Eberwhite and Slauson.

    A few of the apartments were pretty cozy and fixed up but all in all the complex is in need of renovation.

    I live quite close to all of the Avalon housing in that neighborhood. They have done a good job with the other apartments (on Arbordale).

  5. By Bob Martel
    December 1, 2010 at 5:05 pm | permalink

    Mary, Based on $8,000,000 and 32 units that works out to a cost of $250,000 per apartment unit! That is an outrageous price per apartment. Assuming 1,000 SF per unit (which is large,) that’s $250 per square foot! That’s what it costs to build a very high end home (think Barton Hills.)

    Right now, perfectly good apartment complexes in the Ann Arbor area are being sold for $60,000 per unit. What am I missing here?

    On the surface, this looks like a really big rip off of taxpayer money.

    I’d sure appreciate some reassurance that the $8 million price tag is incorrect!!!

  6. December 1, 2010 at 5:15 pm | permalink

    I’m guessing that the “community center” piece is adding a lot to the price. Any information on what that is all about?

    Also, fewer units while they are also bigger, I believe (the townhomes) – evidently a different client base is envisioned.

    Is this in conjunction with a developer, as Near North is?

  7. By Bob Martel
    December 1, 2010 at 7:22 pm | permalink

    Hi Vivienne,

    Given that $250,000 per unit is AT LEAST twice the cost of providing a comparable “for profit” apartment unit in this area, the community center must then be costing $4,000,000. Not bad for 32 apartments. Where do I sign up to rent one of these apartments?

    I am hoping that the $8 million figure is in error. If it is not, then this project is woefully ill conceived and should be rethought. It would be a project like this that drives people to the TEA Party!

  8. December 1, 2010 at 9:00 pm | permalink

    Instead of spending anywhere near this amount, as well as the yearly amounts afterwards for upkeep… why not by homes in various locations for let’s say $150k. There are MANY apartments, condos, and others for sale in the area. Seems like this would be a much better use of funds.

  9. By Margaret
    December 1, 2010 at 9:36 pm | permalink

    I believe the community center is required by MSHDA to qualify for the LITC program. I don’t recall the specifics, but there is some threshold of units (maybe 30) that makes this requirement kick in. Near North is costing 12 million for 29, 1 bedroom units. When asked why, the developers of Near North cited the high cost of construction in Ann Arbor and difficulties with the site. Not a very satisfactory response. My theory is that they spend as much as they can because higher the price tag, the larger the “developers fee” Avalon can skim off the top. 15% of 8 million is 1.2 million that goes straight into Avalon’s pocket to keep the organisation afloat. Avalon does good work and is the best we have… however, they could be more honest about their goals and motives.

  10. By John Floyd
    December 1, 2010 at 11:20 pm | permalink

    Any dirt on why Memorial Christian chose to move?

  11. By Bob Martel
    December 2, 2010 at 9:24 am | permalink

    If these figures are correct, then this “affordable housing project” is very ill conceived and an excellent example of why taxpayers have become so cynical and suspicious of so many government initiatives. It’s enough to turn a Democrat into a Republican (of the Tea Party ilk!)

  12. By Lily Au
    December 2, 2010 at 9:24 am | permalink

    We just have people died of being unhoused. A homeless guy, nick-named “Indian” died a coupe of weeks ago on the street near/behind Maple rd. Kroger.

    Now, we will spend money on demolishing “acceptable” apartments and use $8 millions to build new apartments but with fewer units. That’s the wrong mathematical calculation. We need to think our growing population, we can’t let the number of apartment shrinking. Under such sluggish economy and limited housing fund, please use the fund in better ways to house people as many as possible. We also need to think the amount of money spent on helping those current tenants to find new apartments. The case is like…..many grocery stores trash edible food while we still have people sleep with empty stomachs. We need to make a better connection/communication.

    Please don’t forget those chronic homeless without proper help….mental illness, veteran, disabled, even some have substance-abuse issue…..at least we need something like “Emergency shelter” to keep them warm at night.

  13. December 2, 2010 at 10:10 am | permalink

    I’m concerned about the current tenants who may have a long history in the area – there is a well-known bagger at Kroger who used to live there and probably still does, for example. I’ve seen him walking home. He is likely to be “relocated” to Ypsilanti or some such place.

    I’d also be interested to know whether there are studies about relative needs between singles and families – though I know the answer is, all of them! The new units seem to be geared toward largish families.

    Regarding the lost food issue, Food Gatherers does a great job in capturing food in the area. I’m not sure how people who are living outside access it.

  14. By DrData
    December 2, 2010 at 11:48 am | permalink

    The Kroger bagger doesn’t live at 1500 Pauline; he lives in the units on Arbordale. But, there are others that will be displaced. The current location for these residents is very amenable to public transportation as there is a bus stop at Pauline and Arbordale.

    Yesterday, as I walked by the units I counted what looked like mailboxes. There were 60. That seemed low to me, but even so is far more than the replacement units. My guess is that the plan gets rid of the units that are closest to Pauline and sort of wall-in the complex from the street.

    I agree on the pricing issues discussed. The co-housing community in Scio Township shares many of the features one would expect in this plan. The co-housing units range from 1 bedroom to 3-bedroom units; are all attached to each other; have a shared parking lot, etc. And, yet the market rate for these is well under the cost per unit. And, the co-housing people have a big community center and quite a bit of shared acreage so the comparison is quite fair.

  15. By Alan Goldsmith
    December 2, 2010 at 12:38 pm | permalink

    “Now, we will spend money on demolishing “acceptable” apartments and use $8 millions to build new apartments but with fewer units.”

    Don’t forget tossing people out on the street. Welcome to Ann Arbor. Will there be a German Water Fountain included?

  16. By Alan Goldsmith
    December 2, 2010 at 12:40 pm | permalink

    “Instead of spending anywhere near this amount, as well as the yearly amounts afterwards for upkeep… why not by homes in various locations for let’s say $150k. There are MANY apartments, condos, and others for sale in the area. Seems like this would be a much better use of funds.”

    THAT would be affordable home ownership, not tempoary locations. God forbid we worked toward that goal.

  17. By Mary Morgan
    December 2, 2010 at 11:08 pm | permalink

    The $8 million figure was provided by Michael Appel – I’ve asked for additional clarification regarding what that amount entails.

  18. By Barbara Carr
    December 3, 2010 at 3:23 pm | permalink

    The sale of Memorial Christian Church and it’s conversion to fraternity housing is very sad indeed. It is my understanding that a depleted congregation can no longer afford to maintain the structure and are forced to sell. The building’s historic importance and architectural quality are significant. One wishes there were another solution. Has a contract been signed?

  19. By Bob Martel
    December 3, 2010 at 5:36 pm | permalink

    Mary, this story needs a follow up. If the $250k per apartment unit is correct (clubhouse notwithstanding) this is a real scandal and misuse of public funds!

  20. By Christopher Michael
    December 7, 2010 at 1:59 am | permalink

    It is sad to hear about the church going away, however, that area is almost totally student housing and it will be great to breath some fresh energy and money into that great old building. With the right group, I am sure the facility will get some needed love.

    As for the low income housing, sound a bit rich in my opinion. As residents of Ann Arbor, our elected officials, as stewards of our taxpayer largesse, should ensure that this project done not become an over blown white elephant that ruins the character of the streets or divert focus from the myriad other important zoning and safety issues in the community.

  21. December 7, 2010 at 9:25 am | permalink

    A bit rich is an understatement… if the 250k is really true, Ann Arbor would be better off simply buying condos for families. There’s many 2 bedroom condos on the market for $50k. We could buy each family a 50k condo, give them a 50k trust for education/job training, and save 150k / family (or save 50k and hit 2x as many families).

  22. By Margaret
    December 16, 2010 at 6:48 am | permalink

    To those who doubt that Avalon would spend $8 million on 32 units, please note that they ARE IN FACT spending close to $12 million on just 29 one-bedrooms on Main Street (Near North) and that includes about 1.2 million for the land. They already own the land at Pauline. And when asked, they offer NO real explanation as to why these costs far exceed the cost of similar for profit developments. Part of it is in the $1.2 million development fee. The higher the cost, the bigger the cash back Avalon gets. They do not receive developer fees for remodeling. If Michael Appel disputes this, I would hope he would answer this question directly to the Chronicle. Mary, please ask him.

  23. By Mary Morgan
    December 28, 2010 at 7:43 pm | permalink

    Carole McCabe, Avalon Housing’s executive director, sent this response today to The Chronicle’s previous requests to address the issues raised here by readers:

    We appreciate the opportunity to elaborate on Avalon’s efforts to develop permanent supportive housing at 1500 Pauline. Given the complexity of these projects, we would also welcome the opportunity to explain it more fully in person. The nonprofit development process – especially supportive housing – differs substantially from similar work in the for-profit market.

    The decision to demolish and rebuild on this site was essentially made by MSHDA, the Michigan State Housing Development Authority, after determining that investing in renovating the existing buildings was not ultimately cost effective. We did struggle with the question of density on the site. Of course we hate to lose any affordable housing units, but we know from experience the importance of finding a workable balance when there are many people living in close proximity.

    Avalon’s development costs on this project reflect both standard market development as well as the unique costs of developing permanent supportive housing. Complicated financing packages are necessary to guarantee permanent affordability, and the use of Low Income Housing Tax Credits generates additional administrative costs. This project in particular also includes tenant relocation expenses that are federally determined. As noted, the presence of the community center on site also has a cost, but one we think is well worth the return it provides on community building, support services, safety and security. Avalon works to create community centers at all larger sites to facilitate tenant access to resources and engage both kids and adults in a supportive community. The tenant population for 1500 Pauline is and will continue to be similar to other Avalon projects – people with extremely low incomes, including those who are homeless or at-risk of homelessness.

    We are happy to talk in greater detail about the specific challenges of nonprofit development. Avalon has learned from 18 years of experience that cutting corners on the affordable housing development process inevitably leads to problems later on. Certainly that is one of the reasons why 1500 Pauline is failing now.

    It is important to remember that Avalon stepped in at the start of 2009 to take over management of 1500 Pauline, and two other equally distressed low-income rental properties at the request of the County’s Office of Community Development. The three buildings, still owned by another nonprofit, Washtenaw Affordable Housing Corp, all need major rehabilitation and refinancing. Avalon has spent the last 2 years working with funders to figure out how to preserve the public investment in this significant portion (114 units total) of the County’s affordable housing stock, and we are still at it. The project at 1500 Pauline was never financially sustainable, and the buildings were poorly managed and under-maintained for years. We strongly believe that the property, the neighborhood and, most importantly, the lives of the tenants have improved in the last two years as a result of our involvement.

    Permanent supportive housing continues to be the most successful long-term solution to homelessness, though it remains a challenging business that requires complex and highly regulated financing scenarios. Avalon is always happy to provide tours and/or further information to anyone who is interested. Contact Michael Appel at mappel@avalonhousing.org or call 663-5858. Thanks!

    Carole McCabe
    Executive Director
    Avalon Housing, Inc.

  24. By Alan Goldsmith
    December 29, 2010 at 6:41 am | permalink

    I’m not a lawyer but this reply from Avalon is just a collection of weasel words that address none of the questions about the cost. Can’t Avalon address ANY of those issues/questions posed above? Or is it too ‘complex’ for us to understand?

  25. By Alan Goldsmith
    December 29, 2010 at 2:24 pm | permalink

    To pull a quote from another comment: “Based on $8,000,000 and 32 units that works out to a cost of $250,000 per apartment unit!”

    So is this true or not? Instead, we get PR babble: “Avalon’s development costs on this project reflect both standard market development as well as the unique costs of developing permanent supportive housing.”

    So those ‘unique’ costs work out to $250K per unit? I am taking the lack of a reply to that direct question as a YES.