You are viewing this article in the archives. For the latest breaking news and updates in Ann Arbor and the surrounding area, see
Posted on Mon, Apr 29, 2013 : 5:59 a.m.

Ann Arbor's McKinley Inc. wants to build affordable housing on South State Street

By Lizzy Alfs


Ann Arbor's McKinley Inc. wants to build affordable housing on a vacant site behind the McKinley Executive Centre.

Daniel Brenner |

Related story: South State Street Corridor Plan: A new vision for Ann Arbor's critical gateway

Ann Arbor-based real estate firm McKinley Inc. wants to build affordable rental housing on a vacant 4.47-acre parcel on South State Street, said company CEO Albert Berriz.

It’s an idea the company has been exploring for years, but Berriz said the timing is right as the city moves toward final adoption of the South State Street Corridor Plan — a comprehensive study that examines a 2.15-mile stretch of South State from Stimson south to Ellsworth.

“We think it’s a perfect location for it,” Berriz said. “It’s close to downtown, it has excellent transportation support…right around the corner in walking distance you have the (Kroger and Produce Station) grocery stores and the (CVS pharmacy) right around the corner as well. I think there are certainly a lot of good, walkable services in the immediate vicinity.”

The parcel is located behind the McKinley Executive Centre at 2245 S. State, and it’s nestled near railroad tracks and an Ann Arbor Public Schools administrative property that houses buses. An Ann Arbor Transportation Authority bus stop is steps away from the site.


McKinley Inc. wants to build an affordable housing project behind its McKinley Executive Centre on South State Street.

McKinley Inc.

McKinley purchased the property about five years ago. It has a 2013 assessed value of $481,900, city records show.

The property is accessible from the McKinley Executive Centre driveway off State Street and via Boardwalk from the east end. It has an M1 light industrial zoning designation, which prohibits residential uses.

“We agree with the (South State Street Corridor Plan) that the exclusion of residential uses in M1 zoning is unfortunate for this area, where additional residential development could easily fit in with and support the various university, office, industrial and retail uses,” David Esau, owner of Ann Arbor’s Cornerstone Design Inc., wrote in a letter to city planners on behalf of McKinley last week.

“McKinley would be very interested in bringing their multi-family development and management expertise to bear on such a residential development on the vacant site,” Esau continues.

The idea is still in its preliminary stages, but Berriz said he’s confident that McKinley could bring an affordable housing project to fruition, granted the company receives city and state approvals, including a property rezoning.

Berriz said he’d like to build the project using the Low-Income Housing Tax Credit program, which encourages the development and rehabilitation of affordable rental housing by awarding tax credits to developers of qualified projects.

States are allocated Low-Income Housing Tax Credits based on population, and the Michigan State Housing Development Authority administers the credits to qualified developers that apply for projects in the state.

“The advantage of this program is that the investment will be driven by private side capital that has a very high likelihood of actually bringing affordable inventory online, something we believe is much needed in Ann Arbor and Washtenaw County,” Esau said in the letter. “McKinley and its partners have the financial resources and expertise to make this type of development a reality.”

Earlier this year, McKinley launched a property management partnership with California-based Avanath Capital, an investment firm focused on affordable housing. The McKinley-Avanath partnership operates Low-Income Housing Tax Credit communities in more than 25 communities across the country.

Affordable housing development is encouraged in the South State Street Corridor Plan, which says this type of project should be considered in future redevelopment on appropriate parcels along the corridor. (Download the plan)

Berriz said the one downside to the State Street property is the close proximity of the railroad tracks.

“There aren’t many sites on which you can build affordable housing in Ann Arbor,” he added.

The proposal comes shortly after the Near North affordable housing project on Ann Arbor's North Main Street fell through. The 39-unit project was proposed in a partnership between private developer Three Oaks Group and nonprofit Avalon Housing.

Berriz said the complicated approval process for affordable housing projects can deter developers.

“It takes a sophisticated person that has money, that has staying power, that is willing to take the time (to get approvals for affordable housing),” he said.

He said it doesn’t make financial sense for McKinley to build a market-rate project in Ann Arbor right now. The company was founded in Ann Arbor in 1968 and it owns more than 5,400 apartment units in the region. It recently purchased and renovated several apartment complexes in the area.

“The financing for this kind of transaction has improved a lot. In 2008 and 2009, there was not available equity capital to build this kind of project. 2013 is a much different time to explore and do this than 2009."

Details like the size and design of the project haven’t been determined, but Berriz said the units would range in size and some units would be larger to accommodate families.

Lizzy Alfs is a business reporter for Reach her at 734-623-2584 or email her at Follow her on Twitter at



Thu, May 2, 2013 : 3:44 p.m.

We have enough "affordable" (which is another term for low-income - which brings everyone from detroit that wants to start things up here where they left off there), housing in Ann Arbor - really enough is enough! Move just outside of the city and you can afford nice apartments and homes for rent -

Joe Hood

Wed, May 1, 2013 : 3:34 a.m.

Is that part of the brownfield land?

martini man

Tue, Apr 30, 2013 : 4:39 p.m.

These types of places usually start out quite well with elderly folks or others, who actually need affordable housing . Then after awhile their grandkids along with their broods, cousins on the run from the law, or relatives currently "between" jobs start to filter in. Then the drug deals, vandalism, robberies and even worse, start to occur more and more frequently. Anyone who has ever been a landlord or had dealings with these types of situations, know that it aint easy getting rid of the freeloaders and moochers once they get a foothold . And with the taxpayers helping to subsidize the rent , it becomes even a bigger bureaucratic nightmare.


Tue, Apr 30, 2013 : 12:14 a.m.

I guess we will all have to see how this plays out. Basically from my understanding will the payments to the property management company consist of a government and renter portion? It seems to me that the people who are speaking negatively are worried about the "quality" of tenants that will occupy this proposed development. Now I don't know much about this issue, but although this would be consider affordable housing, individuals would still have to meet the company (McKinley) renting standards right? Or is that all thrown out the door when it comes to these types of developments?

martini man

Mon, Apr 29, 2013 : 11:47 p.m.

Let's hope what they claim will be a reality ..I doubt it... but still hope for it .

martini man

Mon, Apr 29, 2013 : 11:46 p.m.

Probably more of a propaganda ploy for the liberal all caring ,all knowing ,elite of Ann Arbor. Just looking out for the poor and downtrodden. Affordable means that in the end the taxpayers will foot the bill. Gorsh ..who wudda thunk it ??? McKinely are not fools ..just the taxpayers.

Lizzy Alfs

Mon, Apr 29, 2013 : 9:46 p.m.

FYI for those commenting about this, the following is from Albert Berriz: "We will not be asking for any incentives or subsidies of any kind from Ann Arbor or Washtenaw County. The only thing we hope happens is that the site is rezoned office per staff recommendations pursuant to the corridor study so that a Multifamily use is permissible. Further, we will only design the project to yield whatever is allowed per the zoning as of rights. The project will be financed with LIHTC financing and all the equity will come from private side capital."

P. J. Murphy

Tue, Apr 30, 2013 : 5:53 a.m.

So, to more or less parse this statement, McKinley is employing a Federal (HUD) program to finance the construction of this housing development, but does not intend at this time to seek any incentives or tax breaks from state or local sources. Well, last I checked I pay a healthy amount of Federal taxes. So I suppose, at least indirectly, I'm investing in this venture. What bewilders me is the location. No other housing nearby, not even close to a residential area. No parks, no real shopping accessible without an auto. No a great area for kids, unless they like playing near railroad tracks. Sorry, but it just appears to be a scheme to have Uncle Sam assist in developing what otherwise would be a highly problematic piece of real estate.


Mon, Apr 29, 2013 : 7:40 p.m.

"The property is accessible from the McKinley Executive Centre driveway off State Street and via Boardwalk from the east end." Looked on a map and it looks like the land can only be accessed from the McKinley office complex on State St as the railroad tracks prevent access via Boardwalk. Appears to be a terrible location for any form of housing - McKinley must be looking for tax breaks to do something with the vacant land!


Mon, Apr 29, 2013 : 5:12 p.m.

The problem with the new development housing costs in AA is that they are either in the "luxury" category or so-called "affordable" category, which ends up only for low income. What about middle income people who can't afford luxury housing and don't qualify for low income housing? That's where the majority of people are who need "affordable" housing.


Tue, Apr 30, 2013 : 12:06 a.m.

Thank you. I currently work in the financial sector and make pretty good money for my age. Although I could live downtown Ann arbor I would be apartment poor. Based off what Vivienne Armentrout, I'm no where near the "affordable" bracket. Why can't they build housing for regular young professionals making around 40,000. I don't want to live in luxury student housing for 1600+ a month, or low-income apartments I don't even qualify for.


Mon, Apr 29, 2013 : 5:11 p.m.

I've lived here for over 26 years and went to school here in the early 70s. I don't think I've ever been more disgusted with the entitled comments on this page. Get off your high horses and as one person said, go live in the country.


Wed, May 1, 2013 : 2:09 p.m.

Katie, people are entitled to a decent place to live in exchange for their rent dollar. Get ON your high horse and go live in the country and take your hostility with you!

Donald Martin

Mon, Apr 29, 2013 : 4:47 p.m.

McKinley hardly cares about "affordable" -- that's too funny. I had to move 'cos they suddenly upped my rent by 20%, I would never trust that they would refrain from greed. Plus, their maintenance crews are terrible, too.


Wed, May 1, 2013 : 2:07 p.m.

Amen, Donald! when I was a tenant with McKinley, I had to raise H***, threaten to withhold rent, and generally be very unpopular in order to get repairs done.


Mon, Apr 29, 2013 : 5:13 p.m.

Totally agree.

Vivienne Armentrout

Mon, Apr 29, 2013 : 4:41 p.m.

Lizzy has commented in two places about what "affordable" means. She says, "either 20 percent of the units must be for residents whose incomes do not exceed 50 percent of area median income or 40 percent of the units must be for residents whose incomes do not exceed 60 percent of the area median income" To understand what this means, consult the HUD guidelines table available on the county website. Note it defines what 50% AMI is for our area ($29, 500/year for 1 person) and the maximum such a person should expect to pay for housing ($738/mo) - based on 30% of income. Includes utilities. The last part of the table indicates "fair market rents" - there is a footnote that I haven't followed up. It would be for example $760 for a one-bedroom unit. Presumably any tax-credit subsidized apartment would have to follow this price schedule. Note that $760 rent for one bedroom exceeds the guideline for a person earning less than 50% AMI.

Lizzy Alfs

Mon, Apr 29, 2013 : 4:46 p.m.

Thanks for posting this information, Vivienne. Appreciated.


Mon, Apr 29, 2013 : 4:12 p.m.

Just to make sure I don't misunderstand; these comments about "good for McKinley" and "I wonder if they have an ulterior motive" don't really apply, because McKinely gets the same money (and potentially more) than if it was NOT Affordable Housing, they just get money from federal and/or state TAX funded programs instead of from private enterprise. Is this correct?


Mon, Apr 29, 2013 : 4:09 p.m.

McKinley and affordable housing do not go hand in hand. I stay clear of any apartment complex managed by McKinley. Their prices on apartments may be a little lower but they make you pay for every utility their is. In the end their apartments are NOT affordable.


Wed, May 1, 2013 : 2:04 p.m.

Taylor, you are soooooo right. I used to live at Scenic Lake(this was before they changed the name to "Evergreen Pointe", in a ridiculous attempt to give the place a certain panache that it'll never have), and it used to be that they'd include the heat/water in the rent. No more. This is greed, pure and simple so I don't buy for one moment that they are looking out for anyone but themselves!


Mon, Apr 29, 2013 : 4:05 p.m.

For all the live elsewhere folks, just remember that there but for the grace of God go I. I would not however that the upside for McKinley is they have tenants who are receiving funds from another source to buy their gooods and services, just like it is done in higher education.


Mon, Apr 29, 2013 : 7:11 p.m.

I DO live elsewhere. I'd rather be in Hawaii. But they won't build me any affordable housing.


Mon, Apr 29, 2013 : 2:15 p.m.

As a former McKinley tenant(never again!), I'm skeptical. McKinley takes care of McKinley first!


Mon, Apr 29, 2013 : 8:57 p.m.

Agreed. I have made it a point to not rent from them again, as well.


Mon, Apr 29, 2013 : 2:15 p.m.

McKinley Inc. and affordable housing....isn't that an oxymoron?

Lizzy Alfs

Mon, Apr 29, 2013 : 4:46 p.m.

McKinley did partner with Avanath in February and formed a partnership to manage affordable housing communities across the country. Although, developing them in Ann Arbor would be a new move.

jackson west

Mon, Apr 29, 2013 : 2:14 p.m.

It would be nice if they could build affordable housing somewhere outside of Ann Arbor. Do we really need more people here that can't afford a house? This is not a renter community. Look at all of the schools that you would never want your children to go to. These are the schools that have tons of apartment communities. Maybe they should build this somewhere else. Somewhere that rhymes with "glilsilanti"

jackson west

Tue, Apr 30, 2013 : 12:07 a.m.

Diversity is nice sometimes. But not diversity of income. Poor people tend to muck things up. These affordable apartments are super close to Burns Park. It's not fair to people who work hard to live somewhere nice so there kids can go to school with other decent people.


Mon, Apr 29, 2013 : 7:22 p.m.

So, those of us that live in Ypsi or Ypsi township don't care about property values or schools? If Ann Arbor touts itself as being so diverse, then what is this kind of talk from it's residents? Be diverse and don't be Hypocrite.

jackson west

Mon, Apr 29, 2013 : 7:15 p.m.

Let me clairfy. I do nto want poor post graduate adults to be encouarged to move to Ann Arbor. I do not want them living near me. It is bad for schools, which is bad for property values, which is bad for me. Ypsilanti is pretty much..well...its Ypsi. It is a great place for someone who does not have a lot of money. Why change Ann Artbor when Ypsi is already read and waiting?

Susanne Brace

Mon, Apr 29, 2013 : 4:33 p.m.

Not a renter community? So you are saying every single person that lives in Ann Arbor owns a house? No apartment buildings? None? No students renting? Everything is a house owned by one person (or family) and not rented out? Every SINGLE residence?


Mon, Apr 29, 2013 : 3:21 p.m.

People like you would rather there just be a wall built to keep those "not chosen" out. What about the diversity this city is so proud of? Can't pick and choose if you really want to be truly diverse.


Mon, Apr 29, 2013 : 2:41 p.m.

That's the ann arbor spirit I've grown to know. Send the poor people off to the townships and Ypsi and leave the young hipsters for us.

P. J. Murphy

Mon, Apr 29, 2013 : 1:59 p.m.

After looking at the satellite view this seems to be a dubious choice for a residential development. This is a small pocket of land utterly surrounded by light industrial. The local "amenities" are either not all that local or unlikely to be useful for the projected residents. One can't help but wonder if McKinley's agenda here is eek a few bucks out of a property that otherwise has little value. Am I correct in assuming that they will qualify for a variety of "incentives" for building this project?


Mon, Apr 29, 2013 : 1:49 p.m.

Next to a railroad track and a bus garage is a perfect location?


Mon, Apr 29, 2013 : 7:07 p.m.

Agree with beardown. It's all in the marketing. McKinley is just looking for tax breaks to develop basically property that is very undesirable.


Mon, Apr 29, 2013 : 5:12 p.m.

johnnya2 -- While it is true that residents of a McKinley affordable housing can use the Ann Arbor bus system to travel about the city, the cost is high for people with limited disposable income, if they do not qualify for reduced rates. Though unemployment in Ann Arbor is among the lowest in the state it remains higher than before the recession. Section 8 residents would be less likely to have the skills and education to qualify for better jobs. Also I expect that few low income residents will want to spend their limited disposable income at Briarwood.


Mon, Apr 29, 2013 : 3:35 p.m.

I guess close to jobs is all relative. There are buses that run on State Street EVERY day. They can get you to a Kroger that is less than 1 mile away, and to a mall that is close as well. I see tons of jobs at the corner of State and Eisenhower, at the Briarwood area and to the north at the University of Michigan. From a location stand point this is centrally located to a LOT of amenities. Look around at other communities in this town and tell us where you have transportation, shopping and jobs that close?


Mon, Apr 29, 2013 : 2:43 p.m.

For low cost, very little upkeep, housing for persons who can't afford anything fancier, it would seem to be the perfect location. Claim it is close to shopping (it isn't) and close to jobs (not really) and let the government money start rolling in. Slap up something, take the tax breaks and subsidies from the government, and not worry about upkeep until their are far too many complaints to ignore. Based on that, it does seem perfect for them.


Mon, Apr 29, 2013 : 1:39 p.m.

Beware the "gift horse". Is there an alterior motive for this or is McKinley simply doing a good deed? What will it cost the tax payers to support this project? That's something that seem to always be ignored for these "feel good" projects. Personally I don't believe in subsidized housing. If you can't afford to live in Ann Arbor then please go somewhere that you can afford. I see no reason to support people that shouldn't be living here in the first place and even with subsidies remain too poor to really enjoy this town. Reality is often not what you'd like it to be!


Mon, Apr 29, 2013 : 4:59 p.m.

Annarboral has good reason to be skeptical. City Council has recently developed the habit of returning TIF payments to developers as reimbursement for Brownfield remediation and site development. Also City Council has authorized street improvements in front of developments and paid for improved utilities which is usually paid for by the developer. So the city may gain no direct financial benefits from the McKinley project. djacks24- The McKinley affordable housing project will be an isolated residential project without proximate neighbors so social melding with other residents will not be an issue (if it ever would be). Those qualifying for section 8 support can be expected to have limited disposable income. They will be dependent on our bus system to get around Ann Arbor which can be expensive if they do not qualify for reduced rates. Other than that I agree that many Ann Arbor attractions are free or inexpensive though many other enjoyments tend to be expensive.

Susanne Brace

Mon, Apr 29, 2013 : 4:28 p.m.

"Too poor to really enjoy this town?" What exactly do you do in Ann Arbor that costs so much? Would you like an application to live in Ann Arbor so you can pick and choose who you'd like to live with? Clearly "poor" people who don't need to spend money to really enjoy and appreciate Ann Arbor aren't to your liking.


Mon, Apr 29, 2013 : 3:16 p.m.

Seems you are afraid your little Utopia will now be tainted? Don't want neighbors or want to be so choosy about the socioeconomic status of those around you, then move to the country. There are plenty of little private sub-divisions built in the townships for those who only want to be with "their kind". Sorry, but you can't have the whole city to yourself.


Mon, Apr 29, 2013 : 1:28 p.m.

Subsidized, subsidized, subsidized. Just take, take, take and ignore what should be attended to first. Like Main Street. What else is new.


Mon, Apr 29, 2013 : 1:11 p.m.

There already is an affordable housing movement in the area. It's the Georgetown Mall, and every day it continues to stand there rotting it is bringing down the housing prices in the area. I recently mailed my 4th ward "representatives" asking about the progress there, but was ignored like usual.


Tue, Apr 30, 2013 : 9:49 a.m.



Mon, Apr 29, 2013 : 5:01 p.m.

@Veracity - I already signed his petition to get on the ballot


Mon, Apr 29, 2013 : 4:45 p.m.

What do you expect with the two City Councilwomen "representing" you? The 4th ward councilwoman running for re-election this fall has competition. You should consider voting for her opponent who will be responsive to you and the needs of the community.


Mon, Apr 29, 2013 : 1:05 p.m.

How about fixing up the many vacant houses that sit around town and make them affordable?


Mon, Apr 29, 2013 : 12:52 p.m.

Google Earth says it would be about a .7 mile walk one way to Kroger from there (State-Stimpson-Kroger). It would also be about 100yds from the train tracks with no buffer in between. Sounds like a great place for ... light industrial.


Mon, Apr 29, 2013 : 12:18 p.m.

Is that a water or fuel tank off Industrial near the property?

P. J. Murphy

Mon, Apr 29, 2013 : 1:37 p.m.

It's a city owned water tank. I believe storing water pumped up from the wells on the south side of the city.


Mon, Apr 29, 2013 : 11:55 a.m.

If anybody can do this it is McKinley. If McKinley was behind the North Main projects, you can believe that we would not be looking at 8 empty houses and a bill for $100,000 to tear them down. Mr. Berriz gets things done, and Ann Arbor could use more of that. Next time ask him how he feels about the condition of the roads.


Thu, May 2, 2013 : 3:41 p.m.

Except that he is a super right wing Republican that supports the Boy Scouts of America even though they are not an inclusive nonprofit - he helped bulldoze the education funding for the Ann Arbor schools into oblivion and many other not so nice things.

Silly Sally

Mon, Apr 29, 2013 : 11:34 a.m.

Isn't there a lot of of affordable housing to the east in Ypsi? Even more further east in Detroit? The Ann Arbor Public schools wants to increase our property taxes to pay more for each enrolled child, will this, and more housing projects like it exacerbate the school deficit?


Mon, Apr 29, 2013 : 3:25 p.m.

@ Brad, Maybe you are unaware of HOW schools are funded, but MORE pupils equals more money for the school system. So more tax base AND more students means GOOD for the AAPS.


Mon, Apr 29, 2013 : 12:55 p.m.

By increasing the tax base which which will then be needed to educate the additional children living there.


Mon, Apr 29, 2013 : 11:51 a.m.

No, it will help the schools by increasing the tax base. The land now sits vacant. Any development that is taxable will help the schools. Improvements to vacant land increases it's taxable value, and furthermore will help offset the continued loss of taxable properties to the U of M.


Mon, Apr 29, 2013 : 11:34 a.m.

Hi Lizzy, your link to 2245 S. State leads to an page indicating no results. Thanks!


Tue, Apr 30, 2013 : 4:35 p.m.

Ann English I think your name should be Ann Atlas, 90% of your posts are rambling on about roads and locations.

Ann English

Mon, Apr 29, 2013 : 10:56 p.m.

Apparently Hofmann's Furniture is further north than this site. Posting where Keller-Williams is means "Probility" to me; could not avoid seeing the Keller-Williams sign when I went to Probility. McKinley apparently thinks this affordable housing should be hidden from State Street motorists, behind another building.

Lizzy Alfs

Mon, Apr 29, 2013 : 11:44 a.m.

Thanks!,2245+S+State+St,+Ann+Arbor,+MI+48104&gl=us&ei=e1x-UfCzLoPTqAH_qYAw&ved=0CDIQ8gEwAA If you go there and look at the satellite view you can see the lot in relation to the office building and surrounding buildings


Mon, Apr 29, 2013 : 11:27 a.m.

What does "affordable" mean? Affordable for whom exactly?


Mon, Apr 29, 2013 : 3:06 p.m.

does it mean low income housing? student housing? what?

Akshay Walia

Mon, Apr 29, 2013 : 12:47 p.m.

In real estate, "Affordable Housing" refers to government subsidized housing for low income people. It falls under the larger bucket of "Multi-Family Housing".

Lizzy Alfs

Mon, Apr 29, 2013 : 11:43 a.m.

@GoNavy: See my comment above. Pricing is determined based on federal and state requirements


Mon, Apr 29, 2013 : 10:57 a.m.

It doesn't state the price of the housing...............affordable in Ann Arbor is not affordable in most places. How many tax dollars will it take to make this work so we can all subsidize this? And you wonder why the country is going broke and in a race to the bottom................


Tue, Apr 30, 2013 : 11:31 a.m.

Thanks for the additional information Lizzy. My point was we will need to raise taxes in order to pay for this. Even though it seems like money grows on trees in this country, it is actually created out of thin air by printing it or we have to borrow it (and pay it back with interest) in order to make something like this happen, Either scenario is not good as it takes money from the middle class that could be spent to fuel the economy and create jobs as businesses expand. Have you noticed the uptick in the economy? It correlates with the decrease in government spend for anyone who is paying attention. Start increasing government spending again and you might have to lose your job as the economic engine slows again. It also takes income from the middle class to feel the entitlement beast which again means less money for the economic engine. What do they teach in economics classes anymore?

Lizzy Alfs

Mon, Apr 29, 2013 : 11:24 a.m.

The price of the housing is a formula determined by the LIHTC program, and it would change depending on when the project moves forward. "At a minimum, either 20 percent of the units must be for residents whose incomes do not exceed 50 percent of area median income or 40 percent of the units must be for residents whose incomes do not exceed 60 percent of the area median income (as determined and adjusted annually by HUD). The rents on the units must also be restricted." There is more on the program on the MSHDA site:,4641,7-141-5587_5601-21934--,00.html


Mon, Apr 29, 2013 : 10:54 a.m.

Nice to see that McKinley is interested in affordable housing! This will be an interesting process to follow.


Mon, Apr 29, 2013 : 3:03 p.m.

well needed!