Monday, April 23, 2018

Opinion: Ann Arbor should buy back the Y Lot

The city has the option to buy the Y Lot back from Dennis Dahlmann for $4.2 million. This is $1 million less than the city sold the lot for in 2013 and $3 to $8 million less than the the Y Lot is worth (the value of the Y Lot depends on the size of the building built there.). The city should absolutely exercise it option to buy the lot back. To do so is in the best interest of the city. Not just in terms of being able to potentially profit from the property, but also the city has an interest in controlling the fate of this important parcel.

The clause in sale that allowed the city to buy back the lot if Dahlmann had failed to build anything by this year was placed on the sale because there was concern in some quarters that he was buying the lot just to maintain his downtown hotel monopoly. Whether that fear was grounded or not is irrelevant, Dahlmann knowingly entered into the contract. He is not some naive land speculator, he is a multimillionaire who owns numerous properties throughout Washtenaw County.

Dahlmann has sued the city and offered insulting terms to drop the suit. Either giving the city's Affordable Housing Fund $1.5 million and removing all restrictions on the property or offering to sell the lot to the city for $5.7 million instead of $4.2 million. In my opinion the only acceptable settlement would be paying the city the difference between the assessed value of the property and what he bought the property for in 2013 and maintaining all the same restrictions on the deal. e.g. a new 4 year time table to develop the lot.

On a related note, there are those that say the the city should let Dahlmann have the property because of the city exercised its right of first refusal to keep the AATA from buying the property in 2003. I would just like to point out that none of the current members of the Ann Arbor City Council held their seats in 2003.

Gentle reader, if you're interested in the fate of the Y Lot, make sure you tune into tonight's very special #a2council meeting.

4 comments:

  1. Could you explain the math on your "acceptable settlement"? When you say "assessed value", you do realize that the current assessment is likely to be lower than $4.2 million, right? It is unimproved property. Or do you mean the value of the appraisal? In that case, which appraisal?

    ReplyDelete
    Replies
    1. Oops. I meant appraisal not assessment. Specifically the city’s median appraisal.

      Delete
  2. Any developer the city might line up to build it's version of affordable housing (mind you only affordable compared to Washtenaw County medians, not the rest of the state/world) has to do better then the offers being made around the Library Lot. The debate over selling this Public Land property had none of the hand-wringing over proper use that the Y Lot is experiencing, why is that? Core Spaces is proposing that the city pay almost $1.5 million/year back to Core to make up for the rent lost by providing affordable units. That's NOT a community benefit, that's a developer subsidy. We don't need any loser deals like that, masquerading as charity. The Core deal would eat through the $5 million sale revenue dedicated to afforadable housing in 3.5 years, then we would be subsidizing the units in that building in perpetuity. If this is the best our council majority can come up with, they can keep it. I have ZERO trust in council majority's ability to get this right.

    As for 2003, the council acts as a body, it makes no difference who is on it when, when it comes to contracts executed on it's behalf. Moot point.

    ReplyDelete
    Replies
    1. [citation needed] on your assertion that the City will be losing 1.5 million a year on the Library Lot. Only thing I found was the City opting to pay 1.5 million once to get a few more affordable units in the building.

      Delete