City Council postpones vote on 'Y' lot after debate on revenue

Monday, April 16, 2018 - 9:30pm

Mayor Christopher Taylor listens to proposed changes during the city council meeting at City Hall Monday.

Mayor Christopher Taylor listens to proposed changes during the city council meeting at City Hall Monday. Buy this photo
Matt Vailliencourt/Daily

The Ann Arbor City Council convened Monday evening to vote on a $4.2 million repurchase of the “Y Lot,” the former site of the local YMCA on Fifth Avenue, from local real estate developer Dennis Dahlmann. The city originally bought the land in 2003 and Dahlmann purchased it four years ago. The council voted to postpone the resolution until April 23, when they will vote in a closed session. The legislation amends the budget to not exceed the $4.2 million from the General Fund.

Councilmember Jane Lumm, I-Ward 2, emphasized the vote’s postponement will allow the Council to properly review the implications of the decision and the legal risks of the project.

“I’m glad we’re going to take the time and I think there are important objectives to achieve in postponement,” Lumm said. “I would like to see resolving any litigation and avoid risks associated with the city holding this property for a long period of time and also avoid the possibility of nothing happening on this property and I will be sending some recommendations for some milestones because I think it’s imperative that we understand what it would take to proceed with the project and withdraw the lawsuit or the complaint.”

Four years ago, Dahlmann bought the 0.8-acre property for $5.25 million and pledged to revive the vacant lot with affordable housing and commercial developments. However, in February, Dahlmann sued the city for his failed development plans in hopes to gain an additional four years of ownership to complete his plans.

At the previous meeting last week, the Council was split with seven in favor and three opposed. Councilmembers Jack Eaton, D-Ward 4, Sumi Kailasapathy, D-Ward 1, and Anne Bannister, D-Ward 1, all opposed the lot purchase. The council also met twice during closed sessions to discuss the litigation.

Ann Arbor resident Greg Pratt supported the resolution in hopes that the city will develop the land with affordable housing for Ann Arbor residents.

“We have the opportunity right now to do what’s right to create a space downtown for people who have been pushed out,” Pratt said. “I think that we should purchase the land and put affordable housing there, workforce housing. People need the housing now and the time is now to do it.”

Ann Arbor resident Paquetta Palmer further highlighted the need for wider inclusion through these affordable housing measures and believes the city can correct its previous mistakes in earlier purchase deals.

“Unless you can afford the almost $1,000 or more for a one-bedroom apartment, then you are going to be excluded from this community,” Palmer said. “Even though yes, maybe the city did do the wrong thing waiting all this time, you can rectify it by doing it now. We need the housing now and we really need it.”

However, Ann Arbor resident Elizabeth Nelson opposed the resolution. Based on the previous purchase history of the land in 2003, she believes the City has not made any strides to develop realistic development goals.

“I want to know from this group how buying the ‘Y Lot’ now will be different from the last time the city bought it in 2003 because in 2003 the city had very specific goals in buying it related to affordable housing and I haven’t heard anyone yet pin down a goal for city ownership in buying this property,” Nelson said. “Rattling off every possibility is not a goal … Declaring its potential value is not a goal — the lot had value when the city first bought it in 2003, too.”

On the other hand, Ann Arbor resident Jessica Letaw supported the resolution because she believes it will revitalize downtown Ann Arbor and create a more diverse economic and residential community.

“Diversity of use is the key to unlocking downtown’s potential as a focus of economic and social activity,” Letaw said. “A core goal is to encourage a diversity of downtown housing opportunities and the expansion of the downtown resident population to strengthen the downtown’s role as urban neighborhood and public investments and development compliment to private sector resident investments.”

Ann Arbor resident Andrew Stumpff was also in favor of the resolution due to potential economic benefits and increase in Ann Arbor property value over the past four years.

“We know that four years ago that this property was worth on the market a million more than the price the city has the opportunity to buy it,” Stumpff said. “During the last four years the value of Ann Arbor real estate has not declined. This property is not worth less than the $5.2 million in 2014. Data shows a 35 percent increase in those four years … The best property-specific estimate we now have of the value of this lot is $10 million.”

Stumpff highlighted both the economic and social benefits of purchasing the Y Lot “are not speculative.”

“Whether that number is right we are off by even a lot, it’s not speculative that this lot is worth more than 4.2 million; what’s speculative is only exactly how many millions of dollars the city would would squander if it doesn’t exercise (the repurchase),” Stumpff said. “Part of the profit would be allocated to affordable housing.”

However, Nelson raised concerns that this contract is not as simple as supporters of the resolution are claiming.

“Also acknowledge what kind of development restrictions were taken into account with the appraisal numbers,” Nelson said. “There are more than two numbers related to this property. It’s not just one buyback sum and an appraised value. It’s misleading to simplify this issue as just two numbers.”

Yet, Palmer further emphasized the need for a more diverse community, noting Ann Arbor was the eighth most segregated city in the country, according to an analysis of a 2012 Pew Research Center study.

“A lot of young people don’t want to stay here because it is too white,” Palmer said. “We have too many people here that don’t have any diversity economically and that can only lead to worse things happening. I think we can do something if you guys have the will. You should get the will to do it.”

Ann Arbor resident Jarod Malestein also supported the resolution. He claimed the council needs to consider the hard work of current residents and the implications their decision will have on future generations.

“The price of land increased because the rest of the community works hard to make Ann Arbor a desirable place to live and work,” Malestein said. “Increased value comes from the community, not from the idle land speculator. They merely wait for everyone to work hard and profit off of everyone else’s productivity.”