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 Thu, May 27, 2010 : 6 a.m.

Ashley Terrace foreclosure proceeds but owners 'in discussions' with lender

By Paula Gardner

The developers of Ashley Terrace hope to avoid foreclosure on a $20.1 million debt on the downtown Ann Arbor mixed-use highrise.

However, the foreclosure action, filed early this month, is one of several facing the multi-state developers.

Joseph Freed & Associates is currently in discussions with the bank,” said Jane Thompson, spokeswoman for the Chicago-area development company.

According to reports published in the Chicago area, Freed is fighting five foreclosure filings made by Bank of America on projects in four states.

The largest is a project called Block 37, a four-story mall that covers an entire block in downtown Chicago. Freed purchased the property in 2007 from the Mills Corp. - a one-time owner of Briarwood Mall - and attempted to complete the project.

According to court documents cited by Chicago Breaking Business, the $205 million construction loan was out of balance by $42.6 million.

Bank of America also is foreclosing on a $36 million loan made on a retail property in Basalt, Colo., and a $12.6 million loan made to redevelop a mall in Madison, Wis., according to reports in Crain's Chicago Business.

In a statement made to Crain's Chicago Business, Freed said it has extended or modified loans with other lenders, yet “all Bank of America seems to be interested in doing is suing Freed and disrupting projects that have been moving forward.”

In Ann Arbor, Bank of America is seeking repayment of an $18 million loan made in 2005 as the 10-story Ashley Terrace was approved for the corner of West Huron and North Ashley streets. The outstanding debt totals $20.1 million, according to filings.

Local real estate sources said the building has been offered for sale at a discount by the lender, possibly for a price as low as $9 million. Thompson said that possibility is part of the bank discussion.

In the meantime, Freed continues to market the property, which has 99 condos - 71 of which are excluded from the foreclosure - along with 10,000 square feet of retail space and 16,500 square feet of office space.

Paula Gardner is Business News Director of Contact her at 734-623-2586 or by email. Sign up for the weekly Business Review newsletter, distributed every Thursday, here.



Wed, Jun 2, 2010 : 7:12 a.m.

I blame the planning commission for not being able to balance the needs of our community versus the profit margins of greedy developers. As they say about life, this is not a dress rehearsal, but the real deal and I for one am getting sick of watching these ugly buildings going up and remaining empty. If you do not know what happens to empty buildings, please check Detroit for some examples.

I'm Ron Burgandy

Thu, May 27, 2010 : 7:08 p.m.

Please Please Please don't say you're blaming the planning commission for this. The last thing we need is them moving any slower than they already do. The truth is the past couple years turned out to be a bad time to build anything because of the economic downturn.


Thu, May 27, 2010 : 3:02 p.m.

@David: This is the first time I've heard that the planning commission is responsible for making sure every business has a sound business strategy. I'm guessing the developer didn't realize the economy was going to tank when they were planning this. Hindsight is 20/20.


Thu, May 27, 2010 : 11:24 a.m.

"Now A2 has another ugly empty building to add to the collection." That's fine. I big hulking new empty building is better than what was there before. They should have lowered the prices of those places.


Thu, May 27, 2010 : 9:52 a.m.

@ peg dash fab, Well, we supposedly, have various "planning" commissions that are responsible for balancing the WANTS (aka. proposals) of the developers with the needs (aka. city requirements, needs, zoning rules, and scope) of the community, hence planning commissions?! It just seems that now, once again, we are faced with another empty building.

peg dash fab

Thu, May 27, 2010 : 9:13 a.m.

david, you seem to be saying that the city should have rejected the building proposal based on the business case (or "needs versus wants" as you put it). is that even a consideration in the city's decision?


Thu, May 27, 2010 : 7:02 a.m.

The developers of Ashley Terrace clearly overestimated the needs of the city when they proposed this monster building and received approval from city council and planning commission. Ashley Terrace is ENORMOUS: 99 condos, 10,000 square feet of retail space, and 16,500 square feet of office space! The latter of which still needs to be leased! Meanwhile, vacancies persist in other large scale buildings in downtown, even while Ashley Terrace was being built! Don't get me wrong, I'm all for avoiding urban sprawl and love the notion of high density, mix use housing in downtown, but please, next time let's really look at the needs versus wants and make more prudent decisions. Now A2 has another ugly empty building to add to the collection.