Starting this past weekend, the city-owned 87-space surface parking lot at Fifth and William streets in downtown Ann Arbor – known as the former Y lot – was closed. And it might sit unused for a year or longer.
For the parcel to remain in use as part of the city’s public parking system, the pending purchaser of the property, Dennis Dahlmann, would need to reach an agreement on a leasing arrangement with the Ann Arbor Downtown Development Authority. The DDA manages the city’s public parking system under a contract with the city.
Eventually, Dahlmann intends to build a mixed-used development on the parcel, but wants to provide surface parking while the project is in the planning stages. A site plan could easily take a year to design, and to obtain necessary approvals from the planning commission and city council. The city council approved the sale of the land to Dahlmann last year at its Nov. 18, 2013 meeting.
Ben Dahlmann, senior vice president with Dahlmann Properties, attended the March 26, 2014 meeting of the DDA’s operations committee to present a revision to the leasing proposal that Dahlmann had made in January. The original proposal had been for the DDA to lease the property back from Dahlmann for $150,000 a year.
The revised proposal would be for Dahlmann and the DDA to split the net income (after expenses) from the parking lot for the next two years. Dahlmann ballparked that number at around $180,000, which would translate to a $90,000 share for Dahlmann – less than the $160,000 per year that Dahlmann figured he’d owe in property taxes.
The final sale of the property by the city to Dahlmann – at a purchase price of $5.25 million – is scheduled for April 2. No agreement on Dahlmann’s offer to lease property to the DDA was reached at the March 26 meeting. But the committee will be taking up the issue again at its April meeting.