The Ann Arbor City Council unanimously approved plans for a 14-story apartment building near campus Monday night, ending about 10 months of negotiations on the project.
The vote was the final step required at the city level before construction could begin on the 601 Forest complex, to be located at the intersection of South University Avenue and South Forest Street.
When the original plan for the complex was put forth, city residents expressed concern with the apartment’s proposed height — 25 stories — saying it would be too tall for the area it became part of. Others voiced criticism about the traffic and congestion the building could cause in an already busy area.
While the plans for the building itself were easily passed Monday, discussion about a resolution proposing tax subsidies for the project stretched on for several hours. The final vote on the resolutions did not come until after midnight.
In a 6-4 vote, the Council approved up to $8.87 million in tax reimbursements to the developers to subsidize construction and site cleanup. The exact amount of the payment will depend on cleanup costs.
John Byl, a lawyer for the project’s developers, said the next step is to seek county and state approval for the subsidies so construction can begin.
The Council also rejected in a 5-5 vote an an amendment that would have reduced the subsidy to about $4.2 million.
City Council member Ronald Suarez (D-Ward 1) did not attend the meeting.
Dan Ketelaar and Ron Hughes, the project’s developers, applied for the subsidy under the Brownfield Redevelopment Act. The act provides tax incentives for projects that “redevelop a contaminated, blighted or functionally obsolete property.”
During the meeting, Robert Carson, a representative for the developers, said reducing the subsidy from $8.87 million to $4.2 million would jeopardize the development as proposed.
Matthew Naud, environmental coordinator for Ann Arbor, said the soil at the 601 Forest site, on the corner of South University Avenue and South Forest Street, is polluted with dry-cleaner fluid and petroleum, which would qualify the site as contaminated.
The developers have argued the site is “functionally obsolete,” or economically unviable, because the Bagel Factory, one of the buildings now standing on the site, has been vacant for years. But City Council member Mike Anglin (D-Ward 5) said the site’s proximity to campus and the business district on South University suggests otherwise.
“We are one block from one of the greatest universities in the world,” Anglin said. “This is not a depressed site.”
The developers’ Brownfield proposal covers two categories of costs: environmental cleanup and site preparation, which include demolishing the current buildings at the site and infrastructure improvements such as installing sewer and water lines.
During the public comment period of Monday’s meeting, no one spoke against the complex, but several opponents were barred from speaking because procedural rules prohibit the same person from speaking more than once under the same public hearing. The public hearing for the 601 Forest project was extended multiple times since the Council first considered the project 10 months ago.
Several Ann Arbor residents opposed the use of Brownfield subsidies for the developer. They questioned whether the site was polluted enough to qualify for the Brownfield program and if the city was fiscally healthy enough to grant the subsidy.
LSA junior and Ann Arbor native Yousef Rabhi said the developers’ proposed pollution cleanup effort would not work.
“The contamination has leaked underneath the adjacent road, and the adjacent properties,” Rabhi said. “What they’re proposing is to clean up this isolated site, but cleaning up the isolated site will not solve the problem.”
The public comments were followed by a contentious debate among the council members.
City Council member Stephen Kunselman (D-Ward 3) said there are many ongoing high-rise construction projects that would have qualified for Brownfield subsidies but did not apply.
“We are unfairly subsidizing luxury student housing, when other projects did not require these tax subsidies even though they were eligible,” Kunselman said.
City Council member Leigh Greden (D-Ward 3) argued that approving the Brownfield funds would not cost the city anything and was necessary to bring investment dollars into Ann Arbor.
“The only thing we’re talking about here is reimbursing a developer for expenses using the tax dollars generated from development on that site,” he said.
Mayor John Hieftje proposed the amendment to the Brownfield resolution as a compromise. The failed amendment would have cut the subsidy by more than half to only cover environmental cleanup, not infrastructure improvements.
Peter Nagourney, co-chair of the North Burns Park Neighborhood Association, said, “I think giving them the Brownfield money for inevitable infrastructure development would have been a bad idea.
“I was in support of the amendment,” he said in an interview.
Hughes said the $8.87 million subsidy was necessary for the 14-story plan.
Hieftje and Greden said the city had very little power to compel the 601 Forest developers to do anything above or beyond satisfying existing city ordinances. Because the original 21 and 25-story plans had met zoning requirements, there would have been very little legal ground for the Council to deny any version of the proposed development.
“We have limited ability to tell people what to do with their land,” Greden said. “When they meet the codes, it’s ultimately their land.”
Ketelaar said the proposal was “simply not going to make everyone happy.”