Ann Arbor Project stresses 'green' buildings ideas
Ann Arbor project limits parking, stresses 'green' building ideas - by Jennette Smith (Crain's Detroit Business)
Buyers at the Kingsley Lane loft project in Ann ARbor don't get an automatic parking pass for underground parking on site.
In fact, the developers are encouraging buyers to bike, walk or park cars in a deck down the street if they wish because underground parking is sold separately - and is only available for about half of the buyers at the 50-unit project.
Kingsley lane developers Peter Allen and Mark Berg expect to begin construction on the residential project in August. The project applies green building concepts from top to bottom to the site at Kingsley and Ashely streets in the northern part of downtown Ann Arbor.
The project is planned with light-gauge steel construction supported with cement, low-emitting paints, bamboo and cork floors and highly energy efficient windows and appliances.
Berg and Allen are including smaller, more affordably priced units in the mix for the project. Prices run from $220,000 to $600,000, with half of the lofts under $300,000. The units are 425 square feet to more than 1,400 square feet.
"By making these a bit smaller, the overall cost point (of using green building techniques) is not out of line," Berg said. "Buyers are willing to pay for that."
Buyers will have options to live an "Ikea-style" lifestyle with space-conscious cabinetry that has, for example, a kitchen island that doubles as a table.
But Allen said the lifestyle change of encouraging more walking is a larger issue for the enviornment than some of the green construction materials.
"In suburbia you have to drive to everything," he said. "This kind of housing ... you begin to use a bike, get closer to your job, culture and dining."
Kingsley Lane is giving away tennis shoes and bikes to home buyers as part of its marketing efforts. In addition, buyers receive a two-year lease at the nearby Ann Ashley parking deck to store their car. For those who want to pay for the on-sire parking, that is available for $25,000. The project has 25 underground parking spaces.
The plan "decouples the price of the parking from the price of the unit," Berg said. That contrasts to most high-rise loft projects, where the high cost of building underground parking can add $40,000 to $50,000 to every unit, he said.
Allen and Berg have 13 reservations so far. THey plan to begin construction once they have 50 percent of the units sold. The Ann Arbor Area Board of Realtors reports that May condominium sales in the city limits were steady, with sold listings on the market for about 90 days and an average sales price of $206,316.
Neal Warling, CEO of ANn Arbor-based Bluestone Realty Advisors, said Kingsley Lane matches with what the city has pushed for: smaller, more affordable units.
"Ann Arbor is a very environmentally conscious community," he said. "I think this sort of building should be well-received."
THe parking solution is a new idea, and the project should be appealing to "a core of software developers and entrepreneurial companies who want to be close to downtown," Warling said.
Kingsley Lane will include retail and office space in addition to the loft units, when a historic building renovated for the model and sales office is made available for lease. The four-story Kingsley Lane West building will include 15 lofts and five penthouses. Kingsley Lane East is a ninestory tower with th ebalance of the units. The historic building, a former butcher shop at 111 W. Kingsley, is 3,000 square feet.
Allen said the project will apply Leadership in Energy and Environmental Design concepts as outlined by the U.S. Green BUilding Council, but the partners are still deciding if they will seek formal certification. The LEED rating provides third-party verification of green features.
Guy Bazzani, a green developer in Grand Rapids, said he expects the green-building trend to spread to more Michigan residential projects. West Michigan was ahead of the curve on green building, primarily because companies such as Herman Miller and Steelcase pushed the issue. Michigan has more commercial or educational LEED projects than residential so far.
"It's healthier for the occupants. ... We have cut our energy costs in half in our buildings," said Bazzani, owner of Bazzani Associates Inc. who lives in a LEED-certified histroic building.
Developments in more desnely populated downtowns, such as Ann Arbor, also lend themselves to less parking and more walking, Bazzani said. Devlopers and communities should do as much as they can to encourage such projects, he said.
The contractor on Kingsley Lane is J.C. Beal, and the residential brokerage handling sales is Charles Reinhart Co.
Online titan does its own search for office site where it plans to spend millions, hire 1,000
Tuesday, July 11, 2006
News Business Reporter
Google, the Internet powerhouse whose name has become synonymous with online searches, plans to invest between $20 million and $50 million in an office in the Ann Arbor area that could employ 1,000 or more people in the next five years.
The deal to bring the company here, expected to be announced today, hinges on approval by the Michigan Economic Development Corp. of a 20-year tax credit at its board meeting today. The board is almost certain to make way for the significant investment that documents say would create $165 million in new state revenue.
The company has not picked a location yet, but Mayor John Heiftje said city officials have been told that Google is most interested in downtown Ann Arbor.
Executives at the Mountain View, Calif.-based search engine company said Michigan and Ann Arbor in particular, has the motivated, creative and high-minded people it desires as employees as it expands to meet demand for its advertising products.
It is one of the most significant job creation announcements in years because it not only infuses much-needed employment into a sagging state economy, it also helps establish Ann Arbor as a leader in the highly desirable information technology industry.
"I think it's a tipping-point kind of project that signals to the world that Michigan is the state to come to if you have cutting-edge technology,'' Gov. Jennifer Granholm said.
State officials say that, in addition to the 1,000 direct jobs, Google could create an additional 1,200 related jobs in Michigan to support the work in Ann Arbor.
Google would become one of the largest private employers in the area.
The state's tax credits are worth $38 million, said Jim Epolito, president and chief executive officer of the MEDC.
Assuming the board agrees to the tax credit, Google will begin recruiting immediately, advertising positions on its Web page: www.google.com/jobs. The jobs, primarily sales, marketing and business positions, would pay an average of $47,000 a year.
"We expect to have the office up and running by this fall,'' said David Fischer, director of online sales and operations for Google, told The News.
Hieftje said Ann Arbor was picked over other cities such as Boulder, Colo.
"It is the high quality of life we offer,'' Hieftje said. "It's the vibrancy of downtown and it's the talented pool of potential employees that attract companies like Google. These are the kinds of jobs Ann Arborites can do.''
He said city staff has been involved in the discussions.
"We'll be working the governor on a financing package,'' Hieftje said. "At this point, there are no discussions I know about the city's contribution.''
"This is huge for Ann Arbor,'' said City Council Member Leigh Greden, D-3rd Ward. "This proves that Ann Arbor can lead the way in Michigan's economic revitalization.''
Local connections
Google, established in 1998 by University of Michigan graduate Larry Page and Sergey Brin, is one of the fastest growing companies in the country, both in terms of revenue and employees. It had 6,800 workers worldwide at the beginning of April - 1,100 more than at the end of 2005.
Its search engine accounts for 43 percent of all Internet searches. Nearly all of its $6.1 billion in revenue in 2005 came from advertising. The office in Ann Arbor would be servicing the company's main advertising product, AdWord.
The AdWord system allows businesses to bid against one another for use of a search term. The winner then pays Google a set amount every time a Web surfer clicks on their Web link from Google's search page.
"Google's philosophy is to go out, find and hire the best talent we can,'' Fischer said. "We recognize that perhaps not everyone wants to live in California. As we looked around at where we might be able to find the best and brightest and most motivated individuals, Michigan jumped out at us.''
Specifically, Ann Arbor. The University of Michigan was a big factor as was the lifestyle and mentality of the people who live here, Fischer said.
Page, who graduated in 1995 from U-M with a bachelor's degree in engineering and graduated from East Lansing High School, also influenced the decision, Fischer said.
"Larry Page ... knows firsthand about the strong talent pool in and around Ann Arbor,'' Fischer said.
He sits on the university's College of Engineering Advisory Board. During an engineering college commencement address in Ann Arbor in 2005, he asked students whether they would be interested in working for the company.
How the deal happened
Google already has a small office in Ann Arbor that is dedicated to the archiving of U-M's seven million volumes contained in the school's libraries to make them available in digital format. The office has fewer than 20 employees.
The Ann Arbor News reported last June that an agent for Google had contacted local real estate brokers to scout locations but has not reported anything since then.
Granholm said that report prompted state officials to court Google and to stop information about it from leaking to the media.
Michael Finney, CEO of Ann Arbor Spark, a technology business development organization, and the Washtenaw Development Council, said he was contacted about a month ago about Google.
he council has helped Google scout locations and although none has been selected, he said there are three "communities'' in and around Ann Arbor in the pool of site candidates.
Any municipality chosen would have to approve a property tax abatement in order for the company to get the state tax credits.
Finney said a company with 1,000 employees likely would need at least 200,000 square feet, and there are very few existing offices in the Ann Arbor that meet that criterion.
Fischer said the company may move into temporary space until a permanent office can be leased or a new office built.
"All options are on the table,'' he said.
Leasing an office would require a lower investment - apprximately $20 million - while building a new complex would run around $50 million, according to state documents.
One local real estate official said the company was interested in being close to the U-M campus. There isn't enough space in one office building large enough to accommodate that number of employees.
Several real estate brokers mentioned that the Earhart Corporate Center near Plymouth Road and US-23 had 200,000 square feet available and could be a contender. That would be close to U-M's north campus, but several miles from downtown Ann Arbor.
Fun and interesting company
No matter what location is chosen, the office is likely to be one of the coolest around. Google prides itself on creating an innovative, fun and interesting environment.
n the early days of the company, desk "chairs'' were inflatable exercise balls and computers were mounted on doors sitting on sawhorses. Dogs roamed the halls and the company hired the Grateful Dead's former chef to cook meals.
Its employees hold equity in the company as a motivational tool and are expected to work with zeal, but to have fun.
"We all work hard, and take our work seriously, but don't take ourselves seriously,'' Fischer said.
Grady Burnett, the director of online sales and operations for the new Michigan office - and a University of Michigan alumnus, said his biggest challenge would be handling the recruitment of hundreds of new employees and establishing Google's corporate culture here.
"I think ultimately, really establishing the culture of the company and allowing us to expand on that in Ann Arbor'' will be his challenge, Burnett said.
It's unclear how quickly jobs will be added, but Fischer said the company is gearing up. Google will be transferring some people, including Burnett, from California but most of the staff will be new hires.
George Fulton, an economist at the University of Michigan, performed the economic impact analysis for the state used by the MEDC to determine the value of the investment. The model he used predicts the company will produce $2 billion in personal income for workers over the next 20 years.
The development is significant to the local economy because of the gain in jobs, something that could support the struggling real estate market and bolster the retail and service sectors.
But, Fulton said, more importantly, the expansion would attract other tech business.
"The image enhancement. That's really one of the major impacts because it puts Ann Arbor even more on the map as a center for information, technology and scientific innovation,'' Fulton said.
The cool factor of Google puts not only Ann Arbor, but all of Michigan on the map.
Granholm said it's the type of company she hopes will convince college students to stay in the state.
"It is so excellent for those young people trying to decide whether to stay in Michigan post graduation or go somewhere else,'' she said. "They should stay.''
Epolito said the combination of Google along with the expansion of other tech businesses in Ann Arbor and the life sciences initiative at U-M could begin a snowball of new-economy jobs in the region and state.
"For us, this is a home run,'' he said. "I think in the state, we've hit some singles and some doubles along the way, but this is a home run.''
Epolito said Google never tried to play Michigan against another state, but that the state always felt as though it was competing against others.
"In the end, we put our absolute best economic package on the table, that we think could potentially compete with any state,'' he said. When the deal is public "there will be a lot other states that probably could have surpassed it, but I don't think it was all about that.''
Tim Marshall, president of the Bank of Ann Arbor, said the announcement points to a strong future for the area.
"It's a sign of the future. ... Ann Arbor has shown a nice track record of attracting and growing technology-based companies and this just a continuance of that progress.''
News business reporter Stefanie Murray and staff reporter Tom Gantert contributed to this report. Mike Ramsey can be reached at mramsey@annarbornews.com or 734-994-6864.
