Colliers, Chaconas to Broker City’s Y Lot

Colliers International and local broker Jim Chaconas have been selected to handle the possible sale of the former YMCA lot, located at the corner of Fifth and William in downtown Ann Arbor. The roughly 0.8 acre parcel, owned by the city of Ann Arbor, is  used as a surface parking lot in the city’s public parking system. City administrator Steve Powers notified councilmembers of the decision in an email sent July 3, 2013.

Highlighted in yellow is the location of the former YMCA lot, which the city of Ann Arbor is preparing to sell. A $3.5 million balloon payment on the property is due at the end of 2013.

Highlighted in yellow is the location of the former YMCA lot, which the city of Ann Arbor is considering selling. A $3.5 million balloon payment on the property is due at the end of 2013.

At its March 4, 2013 meeting, the Ann Arbor city council had voted to direct the city administrator to prepare an RFP (request for proposals) for brokerage services to sell the lot. The only councilmember to dissent on that vote had been Christopher Taylor (Ward 3).

The city had used a loan to purchase the property from the YMCA for $3.5 million in 2003. The council voted in 2008 to extend a five-year loan with the Bank of Ann Arbor for another five years, through the end of 2013. The interest rate is 3.89%. The interest-only payments work out to roughly $140,000 a year. By the end of 2013, the total interest paid will be around $1.4 million.

A building on the site was condemned, and the cost of demolishing it and abating asbestos was around $1.5 million. The Ann Arbor Downtown Development Authority covered the demolition costs and has covered half of the interest payments. So the total amount of Ann Arbor governmental investment in the property is at least $6.4 million.

Revenue from the surface parking lot on the site – which charges a $1.40 hourly rate – amounts to $105-$140 per space per month for roughly 140 spaces. Through the end of 2012, the lot  generated a rough average of around $20,000 per month. But usage has decreased since the opening of the new 711-space Library Lane underground garage, located across the street. And the number of spaces available for parking on the lot has decreased from 140 to 76 spaces – as some of the area has been used for construction staging for the new Blake Transit Center under construction by the Ann Arbor Area Transportation Authority.

That parking revenue from the former Y site is collected by the Ann Arbor DDA, which operates the city’s public parking system under contract with the city. Under terms of that contract, the city receives 17% of the gross parking system revenues. Also under terms of the contract, the DDA has the option to object to eliminating a facility from the parking system, within 30 days of notification by the city.

The Y site is one of five parcels that was the focus of the DDA’s Connecting William Street project. The Connecting William Street project was undertaken by the DDA based on a directive from the city council, on a unanimous vote, given at its April 4, 2011 meeting. And at a Jan. 7, 2013 working session, the DDA gave a presentation to the council on its recommendations for future use of five city-owned parcels in the downtown area – the former Y lot, the Kline’s lot, the Palio lot, the Fourth and William parking structure, and the top of the Library Lane underground parking garage.

The council never took action on the Connecting William Street recommendations. However, at its March 5, 2013 meeting, the Ann Arbor planning commission voted to adopt the report as a resource document supporting the city’s master plan.