Correction appended: A previous version of this article incorrectly stated that the Ann Arbor City Council approved a proposal to build a new apartment complex on East Washington Street.
Ann Arbor City Design Review Board recently considered a proposal for construction of a new 13-story, 173-unit high-rise apartment on East Washington Street called The Varsity — a project expected to compete with local apartments like Sterling 411 Lofts and Tower Plaza Condominium.
Donnie Gross, president of Potomac Holdings — the company in charge of building the new complex — said their goal is to break ground in early 2012 and have the apartments available to students by fall 2013 in an effort to help house a growing demographic of students.
Gross said he feels University dormitories have not kept up with the increasing demands of the growing student population and that even with renovations and additional dormitories, a majority of the school’s dorms are outdated.
“We thought that the student housing market in Ann Arbor was underserved,” Gross said. “But the main two reasons for bringing (The Varsity) to Ann Arbor is the location and the socioeconomic makeup of students.”
The Varsity will include features like amenity spaces, fitness centers and business offices, and each apartment will also have its own washer and dryer, Gross said. He added that housing options will include one-bedroom, two-bedroom and four-bedroom spaces with a corresponding number of bathrooms to ensure that each student will have a private bathroom of their own.
“Our plan is to bring (a type of apartment) that is not currently in Ann Arbor,” he said.
Mark Foraker, senior vice president of The Dinerstein Companies which owns Sterling 411 Lofts, wrote in an e-mail interview the he thinks The Varsity will fill a different niche than his complex that offers various apartment styles.
He also wrote that although leasing for this year was slower than the last, he still anticipates filling all his rooms for the upcoming semester.
“The Varsity’s additional apartments will likely put further downward pressure on rents in the market as a whole and particularly those now targeted at the highest rents,” Foraker wrote. “The well run, professionally managed projects will probably be fine, but it will be very competitive in the next few years.”
Brian Tomsic, associate broker for University Realty Associates in Tower Plaza Condominium, said he had not heard of the recent plans for The Varsity but is concerned about how the Ann Arbor housing market will be impacted.
He said he feels confident about business for Tower Plaza Condominium, listing proximity to campus, soundproof rooms and high security as amenities students will continue to find attractive in the housing search, adding that they generally rent out all the rooms Tower Plaza offers.
He added that while the new development may pose as a threat to him and the other real estate companies on campus, it may hurt the smaller landlords in town at an even greater degree.
Joon-Young Chung, a Ross School of Business graduate, said he chose to live in his current apartment because of its location, cost and space, adding that he tried to avoid high-rise apartments around campus because of the price.
Chung said he thinks the reason high-rise apartments like The Varsity do well in Ann Arbor is because students value high quality living, though this isn’t a priority for him.
“Being in college, luxury (in housing) is not something I need more than necessity,” he said.