Council to debate plans for library lot project

Thursday, January 14, 2016 - 7:27pm

After several months of reviewing proposals and debating the topic, Ann Arbor city staff are urging City Council members to vote to begin negotiations for one of two proposals over the development of the site above the Library Lane Parking Structure at their next meeting.

The lot in question is roughly 0.8 acres and is located on Fifth Avenue in downtown Ann Arbor, above the Library Lane parking garage. The land, which formerly served as a parking lot for library visitors, currently houses both greenscaping and 52 parking spaces.

This property has been an ongoing question for the city of Ann Arbor for several years. In 2010, the idea of converting the empty lot to a hotel was debated but ultimately discarded.

Stephen Rapundalo, a former Ann Arbor city councilmember who served as the chairman of the committee pushing for hotel construction six years ago, said at the time the primary focus for their group would be building proposals that wouldn’t pull from city funds.

“We don’t want to see a city dime go toward these projects,” he said.

Now, in 2016, two projects are competing for the space. A memo was sent to Interim City Administrator Tom Crawford on Dec. 3 containing two distinct proposals from competing real estate firms in Chicago for the establishment of multi-million dollar high-rise developments in the city-owned library lot. These proposals have been under consideration for months, but until now no direction has been given as to which one will ultimately be chosen.

One proposal, from real estate firm Core Spaces contains two possible schemes. Scheme B, a $10 million proposal, suggests a building that is 352,496 square feet. Scheme C proposes a building that is slightly smaller — 22,524 square feet, which costs $3 million less. Schemes B and C of this proposal have purchase prices of $10 million and $7 million respectively.

Alternatively, a proposal from real estate firm CA/Hughes, calls for a building that is 273,334 square feet and will come with a purchase price of $5.11 million. It proposes an updated design by removing the majority of the retail on the ground floor of the covered plaza. It also calls for removing a staircase but keeping the upper level terraces, with additional added rooftop terraces.

Though the council’s vote will ultimately decide which proposal is activated, Crawford’s office has consolidated information from relevant departments within the city and is making a final recommendation that the council support the Core project.

Discussion as to how to develop this lot has been ongoing since the establishment of the Library Lane underground parking garage, the construction of which took place from 2009 to 2012. One thing, however, is certain: The land will likely be a retail development, not a park.

According to councilmember Zachary Ackerman (D–Ward 1), various city departments have debated the merits of using the land as an urban park, but Crawford's office is encouraging City Council to vote in support of the construction of a high-rise building instead. Ackerman noted that Ann Arbor already contains over 2,200 acres of parkland, which is difficult and expensive to maintain.

He said officials in the Ann Arbor Parks Advisory Commission do not recommend building a park in this location. The damage the land incurred during the construction of the underground parking garage connecting Division and 5th streets between William and Liberty streets is such that the ground is no longer capable of sustaining trees, which for Ackerman makes the idea of a park unrealistic.

“This space was not designed with a park in mind,” said Ackerman. “To the north are the backs of buildings, to the south is a pretty solidly walled side of the library and to the east and west are one-way streets, creating very little visibility for the park.”

Previous councilmembers have expressed similar sentiments, Rapundalo said the inclusion of open spaces that would serve as public domain were shot down in earlier discussions based on the ultimate cost to the city.

“While [the parks] are idyllic, the fact of the matter is that they do cost money,” Rapundalo said.

The money required for park maintenance would have to come from the city, a financial burden the council was unwilling to adopt in the past.

The two proposals currently in play for the property include different recommendations as to how much land would be reserved as common space, but both meet the minimum requirement set forth by the resolution.

Councilmember Kirk Westphal (D–Ward 2) said the idea of utilizing the land entirely as a public park would never have gotten off the ground.

“The amount of open space has been a tug of war over the past few years,” Westphal said. “A park covering the full site was never an option.”

Ackerman said he sees the proposed plans making use of the land in an innovative and productive way.

“There is the option to see retail, commerce, hotel and residential all interplay at once, activating the area in a very unique way,” Ackerman said.

Because the city of Ann Arbor currently owns the land in question, Ackerman said through the influence of other city departments, the council will be able to utilize the space in a way that suits the needs of this city.

“We own the land, so there is a lot of flexibility about what we can do,” Ackerman said.

To reap the most benefits from the project, the city is considering selling the air rights to the land above the Library Lane Parking Structure, with Core serving as the potential buyer.

“The vote tally on Tuesday might give an indication if there is enough support to eventually sell the land,” Westphal said.

Half of the sales price of the lot would go to a trust fund designated for affordable housing in Ann Arbor. Up to $5 million could be placed in this fund, depending on which proposal is ultimately chosen.

According to Jennifer Hall, executive director of the Ann Arbor Housing Commission, the trust fund plays a vital role in funding affordable housing initiatives in the city.

“The primary sources of revenue for the fund are general fund contributions from City Council — sales proceeds from the sale of city property and private developer contributions,” she said.

Hall added that the development of this lot is important for the development of further projects in affordable housing in the city, noting that the AAHC is in the middle of redeveloping all 18 public housing sites in the city, which include 355 apartments for affordable housing. $60 million is needed to complete this project.

Ackerman agreed, saying that a healthy trust fund is needed in order for action to be taken in this area. He said other than the contribution from the Library lot, there are no other clear funding mechanisms.