Library Lot Proceeds to Affordable Housing?
The Ann Arbor city council is expected to consider a resolution at its April 7, 2014 meeting that would direct the city administrator to allocate half the proceeds from a possible upcoming real estate sale to support affordable housing. The land in question is the surface of the Library Lane underground parking structure, which completed construction in the summer of 2012. [.pdf of draft resolution on Library Lot sale]
The Library Lane parking deck is highlighted in yellow. The name “Library Lane” is based only on the proximity of the structure to the downtown location of the Ann Arbor District Library. The library does not own the structure or the mid-block cut-through. (Base image from Washtenaw County and City of Ann Arbor GIS services.)
From the resolution: “Resolved, That City Council direct the City Administrator to allocate 50% of any and all proceeds, after fees and closing costs, from the sale of development rights at 319 S. Fifth Avenue [the Library Lane lot] to the affordable housing fund.” Use of money in the city’s affordable housing trust fund is subject to recommendations by the housing and human services advisory board (HHSAB).
Based on a ballpark estimated value for the property of $6-7 million dollars – given by Jim Chaconas of Colliers International at the council’s March 17, 2014 meeting – the resolution would translate to somewhere in the neighborhood of $3 million to support affordable housing, depending on fees and closing costs.
No specific deal appears to be in the offing to develop the top of the structure. But the council voted at its March 17, 2014 meeting to hire a brokerage service to list the development rights to the top of the underground parking garage for sale. At the same meeting, the council passed a separate resolution that reserved 6,500-12,000 square feet on the Library Lane site for a publicly owned urban park.
The resolution allocating 50% of proceeds of a Library Lane sale to support affordable housing is sponsored by four councilmembers: Sabra Briere (Ward 1), Christopher Taylor (Ward 3), Chuck Warpehoski (Ward 5) and mayor John Hieftje.
The strategy of channeling at least some of the proceeds of land sales to support affordable housing efforts has been a consistent part of city policy dating back several years. However, the council has not always agreed on the portion of a sale that should be allocated to support affordable housing. At the March 16 Sunday night caucus, Briere indicated one reason she might be reluctant at the following evening’s council meeting to support the hiring of a broker to list the Library Lane development rights for sale: She did not at this time want to take on the fight with other councilmembers about what to do with the proceeds. But Briere voted with seven of her colleagues on the 8-1 vote that saw only Sumi Kailasapathy (Ward 1) dissenting. Sally Petersen (Ward 2) and Margie Teall (Ward 4) were not present for that vote.
The pending sale of the former Y lot in downtown Ann Arbor – on William between Fourth and Fifth avenues, across the street from the Library Lane site – is expected to generate roughly $1.4 million in net proceeds from the $5.25 million purchase price. That sale to hotelier Dennis Dahlmann has a closing date on April 2, 2014. The council voted at its Dec. 16, 2013 meeting to allocate all of those net proceeds to the affordable housing trust fund. More recently, at its March 3, 2014 meeting, the council directed the city administrator to prepare a budget resolution that would – upon completion of the former Y lot sale – allocate $600,000 from the affordable housing trust fund to the Ann Arbor Housing Commission, to support major capital improvements to its properties.
More than a year ago, at its Oct. 15, 2012 meeting, the council adopted a general policy on proceeds of land sales that was based on a budget committee recommendation. Essentially the policy is to consider land sales on a case-by-case basis, considering all the needs of the city. A nod to affordable housing was included in an amendment added at the council meeting in the form of a statement that all needs of the city would be considered in deciding the use of land sale proceeds – but “especially the need for affordable housing.”
The draft resolution to be considered at the April 7, 2014 council meeting cites the budget committee’s recommendation, which was adopted in the Oct. 15, 2012 council resolution, that “no less than 10% of net proceeds of any sale will be allocated and distributed to the affordable housing trust fund …”