Ann Arbor News - Downtown Residential Scene set to explode
Sunday, April 30, 2006
Downtown residential scene set to explode
City officials hope market won't become saturated
BY TOM GANTERT - News Staff Reporter Source Ann Arbor News
he Ann Arbor City Council has said it wants more residents downtown.
Developers have been listening.
There are about 800 residential units being proposed in nine projects for the downtown area right now. To put that in perspective, from 1990 to 2000, only 274 housing units were added to downtown, including the Ashley Mews project at the south end of the Main Street retail district.
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Developers say more downtown residents will bring renewed life to the downtown scene. City officials are crossing their fingers, hoping that market won't be saturated.
So far, so good. The developers are reporting strong sales in the three projects that have started selling units. Prices range from $210,000 for base units to $1.2 million for penthouses.
Liberty Lofts, at First and William streets, has sold 49 of its 68 units, including its 15 penthouses. Ashley Terrace, at Ashley and First streets, has sold 42 of its 92 units. Loft 322 on 322 E. Liberty St., has sold all 21 of its units.
"It seems to be working,'' said Jean Carlberg, a member of the City Council and the Planning Commission. "The demand we hoped was there seemed to be realized.''
But Carlberg is also cautious with her optimism.
"You have to also keep in mind that we only have one that is actually there for someone to see,'' said Carlberg, referring to Liberty Lofts. "A question everyone has is, 'What is the length of time it will take all of these to be purchased?'''
Joey Scanga, a consultant from Calthorpe Associates hired by the city to review its downtown zoning, published a report that had growth scenario estimates.
Scanga's report estimated a medium expectation growth scenario would capture 746 units by 2015. The city's goal was to have 2,000 additional residences in the downtown by 2030.
Developers say the key will be the timing.
Some of the proposals are far from being approved. For example, Glen Ann Place - proposed for Glen Avenue between Catherine and Ann streets - has 112 rental units on hold. It was approved by the City Council and the Planning Commission, but the city's Historic District Commission rejected it, leaving it in limbo.
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"We think there is a market,'' said Ed Connell of Joseph Freed Associates, which is involved with Ashley Terrace, Washington Terrace and Glen Ann Place. "If all of those units hit at all the same time, will it affect absorption? Of course.
"If it is staged over time, the market will correct itself. The long-term prospect for Ann Arbor is good. Is it going to absorb 800 units in one year? Probably not.''
Fred Beal, a developer who served on the city's Downtown Residential Task Force, said it could take as long as five years for some units to come to fruition.
As long as projects are selling units, more will continue.
Developer Peter Allen plans to break ground in August on his Kingsley Lane project, which will include 46 to 50 condominiums with a nine-story building at the corner of Kingsley and Ashley streets in northwest downtown.
"We expect we will do just fine,'' Allen said. "All the competition is going to wait and see how we do.''
Local developer Ed Shaffran has his doubts that market demand is strong enough for the numerous housing projects.
He said there is some demand. "But is everybody competing for the same 20 people out there? I don't know,'' he said. "If there is a huge demand for housing, it is certainly under the $300,000 price point.''
Shaffran said that can't be met in the downtown. "Not unless you want (a condo) the size of a closet,'' he said.
Developer Scott Chappelle of Strathmore Development said the city needs downtown residents.
"If the downtown business district is not able to gain rooftops, it is going to continue to struggle,'' Chappelle said. "Businesses follow rooftops. It's that simple. If you don't have a critical mass of residents living and spending their money downtown, you are going to have problems.''
Tom Gantert can be reached at tgantert@annarbornews.com or 734-994-6701.
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