Resolution on Y Lot: Dahlmann 1st Choice

November 1, 2013 at 4 pm

A resolution added Friday to the Ann Arbor city council’s Nov. 7, 2013 agenda would direct city administrator Steve Powers to negotiate a sales agreement with Dennis Dahlmann for the purchase of the city-owned property north of William Street between Fourth and Fifth avenues in downtown Ann Arbor. Dahlmann has offered $5.25 million for the property, known as the Y lot. It had been listed at $4.2 million. [.pdf of Dahlmann offer 10.17.13]

If those negotiations are not successful, then the resolution directs the city administrator to negotiate with CA Ventures (Clark Street Holdings).

The memo accompanying the Nov. 7 resolution states:

The offers from Dennis Dahlmann and CA Ventures are the strongest (cash, no contingencies, sales agreement, close in 2013) of the five proposals. Differences between the two offers are slight, but may be significant to city council. Dahlmann is proposing a purchase price of $5,250,000. CA Ventures is proposing $5,150,000. Dahlmann is proposing to build to less than the maximum density allowed by D1 zoning. CA Ventures’ offer assumes the ability to build to the maximum density allowed by D1 zoning.

The Nov. 7 resolution directs the city administrator to provide a purchase agreement for the property for the council’s consideration at the council’s Nov. 18 meeting. That purchase agreement is supposed to include protections against the property not being developed.

While the council’s Nov. 7 meeting follows the Nov. 5 city council elections, the Nov. 18 meeting is the first meeting of the newly constituted council. The Nov. 7 resolution is sponsored by mayor John Hieftje and Stephen Kunselman (Ward 3).

The city received five bids on the property by the Oct. 18 deadline. [.pdf of summary page by Jim Chaconas]

The city hired Colliers International and local broker Jim Chaconas to handle the possible sale, as the city faces a $3.5 million balloon payment this year from the purchase loan it holds on that property. The city has owned the land for a decade.

Now a surface parking lot, the site was zoned D1 as part of the original A2D2 (Ann Arbor Discovering Downtown) zoning process. The site was also one of five parcels that was the focus of the Ann Arbor Downtown Development Authority’s Connecting William Street project, and was part of a more recent evaluation by the city’s park advisory commission as a potential downtown park.

Dahlmann owns the Campus Inn and the Bell Tower hotels in downtown Ann Arbor.

Added on Nov. 1, 2013 at 5 p.m. after initial publication: In a letter to the city dated Oct. 30, 2013, Dahlmann indicates that it “plans to develop a mixed-use project on the Y Lot, with destination retail/restaurant space on the first floor, large plate office space on the remaining lower floors, and residential apartments on the upper floors.” The letter continues, “density on the Y Lot will be significantly less than the maximum allowed by D-1 zoning. There will not be a massive big-box building covering the site.”

Dahlmann’s Oct. 30 letter also describes an open-space element:

… a substantial landscape open-space designed by a nationally known landscape architect SmithGroup JJR of Ann Arbor and maintained by the developer. SmithGroup JJR designed the fountain and gardens in front of the campus in, which had been a featureless concrete slab when Dahlmann Properties purchased the hotel that had previously been in receivership. SmithGroup JJR also designed the Central Park Dahlmann Properties proposed for the Library Lot in November 2009. Elements of that plan will be incorporated in this project, including among other things, a grand fountain.

The letter emphasizes that the residential component will not target the student demographic, stating there will be no four, five or six bedroom apartments. The timeframe for development indicated by Dahlmann in the Oct. 30 letter is under a year, with an indication that Dahlmann will “submit its site plan to the planning commission within 6 to 12 months of closing the purchase and will adopt and be bound by the recommendations of the city’s design review board.”