In a letter sent to Ann Arbor councilmembers and other government officials, Avalon Housing‘s senior developer Michael Appel has announced that the Near North affordable housing project will not move forward. The development team has determined that the project, which was to include 39 new affordable housing units, 16 of them as supportive housing, is not feasible as planned. [.pdf of letter from Michael Appel]
A change to the FEMA flood maps is highlighted in Appel’s letter as a crucial factor in the inability of the project to move forward. The new maps, adopted in 2012, show an expanded floodway, which cuts across the corner of the parcel. That mean that federal funds – part of the project’s financing – could not be used. [1992 FEMA floodway map] [2012 FEMA floodway map]
At the Ann Arbor city council’s Aug. 9, 2012 meeting, city staff indicated that seven existing houses on the proposed building site will be demolished. A fund had been established previously to pay the upfront costs for demolition of nuisance properties, and on Aug. 9 the council authorized contracts with a set of demolition companies to handle such work. Also at the Aug. 9 meeting, community services area administrator Sumedh Bahl said that in 45-60 days from that meeting, the houses would be down – so as soon as Sept. 23.
Appel had addressed the council on Aug. 9 and had already pointed out the FEMA floodmap issue as a major challenge.
The project’s demise will have an (positive) impact on the finances of the Ann Arbor Downtown Development Authority, which had pledged $500,000 to support the project when completed. Of that amount, $100,000 was contingent on the project meeting LEED certification. The DDA board had extended the grant about a year ago at its Sept. 7, 2011 meeting.
It’s now not clear what the future of the site will be. However, Appel’s letter indicates the development team “… will continue to work with local and state government and other partners to explore alternative development options for the site.” The property is owned by Near North Limited Dividend Housing. Avalon Housing had partnered with Three Oaks Group on the project.