You are viewing this article in the AnnArbor.com archives. For the latest breaking news and updates in Ann Arbor and the surrounding area, see MLive.com/ann-arbor
Posted on Thu, Sep 13, 2012 : 5:58 a.m.

Campaign circulates to gather support for $50M high-rise proposed for South University

By Lizzy Alfs

Gateway_Rendering.png

A rendering shows the Gateway, located at 1320 S. University Ave., with the new Landmark high-rise shown on the right.

Rendering by Brad Moore

The owner of a 2.5-story student apartment building on Ann Arbor’s South University Avenue wants to “reinvigorate” the University of Michigan campus area with a new $50 million apartment complex.

The mixed-use development, called the “Gateway,” would be located at 1320 S. University Ave., next to the new Landmark high-rise.

But in order to build the 145-foot tall building, the property owner must overcome a zoning obstacle: the site is located in the city’s D2 zoning district, which has a height limit of 60 feet.

In February, property owner Phil Sotiroff — who also owns Ann Arbor’s Prime Student Housing — requested the property be rezoned from D2 to D1. The D1 zoning district would allow for a building 150 feet tall.

At the time, Sotiroff submitted an “area plan” with the rezoning request that outlined the potential for the site.

Ann Arbor Planning Commission voted unanimously against the request after the city’s planning department recommended denial, reporting that the proposed rezoning “is not in keeping with the master plan recommendation for the subject site.” (Read the full staff report here)

The parcel was zoned D2 in 2009 when the city adopted its A2D2 zoning changes. It’s located adjacent to the 14-story Landmark to the west and a fraternity house — with the "mudbowl" — to the east. It also abuts a house on Forest Court to the south.

the_gateway.jpg

A rendering of the proposed Gateway project at 1320 S. University Ave.

Rendering by Brad Moore

Now, Sotiroff and his representatives are preparing to go before Ann Arbor’s Zoning Board of Appeals at its Oct. 24 meeting, and they have launched a marketing campaign and petition to gather support for the project.

Sotiroff is seeking zoning variances that would allow him to construct a building permissible under the D1 zoning, but with added restrictions that would minimize the impact on neighboring properties.

The campaign, termed “Yes to the Gateway,” argues that downtown Ann Arbor needs better, safer living environments for students.

The proposed building would “provide Ann Arbor with the greater density and walkability needed to meet the goals and vision for a vibrant downtown,” according to the project’s website.

Tina Bassett of Bassett & Bassett Inc., a spokesperson for the project, compared the Gateway proposal to the neighboring Landmark high-rise.

She said the building, which was designed by Brad Moore of Ann Arbor-based J Bradley Moore & Associates, would house as many as 500 tenants. No official site plans have been submitted to the city of Ann Arbor.

Amenities at the building would include an exercise studio, community room, entertainment center, about 6,000 square feet of ground-floor retail and an outdoor cafe. Parking is included below, at and above grade at the rear of the building.

“It’s a quality, high-class looking building…we’d have it fit in and be very complementary to Landmark and everything else being developed in that area,” Bassett said.

She said the site is a “natural fit” for this kind of project, particularly because the zoning allowed for a higher density development prior to 2009.

In 2008, the site was included in the plans for University Village, an ambitious high-rise development that was proposed before it was scaled back as 601 Forest, now called Landmark.

The proposed University Village was for a 582,390-square-foot structure with two connected towers that would rise as high as 26 stories. The project was later reduced to one 14-story structure located at 1300 S. University Ave., and the zoning at 1320 S. University Ave. then changed.

“(The Gateway), we thought, would be a really nice, natural step down (from the original proposal),” Bassett said.

“This whole area needs this kind of redevelopment. South University is where students thrive,” she continued.

Along with Landmark, the 200-bed Zaragon West and 144-bed City Place apartments both opened last month, bringing a total of nearly 1,000 new beds downtown. Several other housing projects are in the city's pipeline.

Visit the Gateway's website to sign the petition, or visit the project's Twitter page.


View Larger Map

Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.

Comments

Jay Thomas

Thu, Sep 13, 2012 : 9:32 p.m.

I have been for more development but I'm not sure the demand exists for endless student housing. This might be a classic market bubble.

LXIX

Thu, Sep 13, 2012 : 5:30 p.m.

Have a relative recently accepted to UM among others. She choose an 'other' because it A] is intellectually notable and entry exclusive B] has a beautiful campus walkable & self-contained C] enjoys a much nicer social & environmental climate When the University/industry/City planners get a clue that A] endless common growth is out while exclusion and originality are the new 'human value' B] technology now allows for remote interactive learning from any teen-paradise playground. C] Knowledge is fluid so the lucrative foreign student market likewise will relocate (home). D] very few people actually prefer to be crowded in by cement walls versus low open spaces. These ugly high-rises serve little purpose - except maybe for those poor seniors of the future. Keep on building skyscrappers. hospital wings, sports complexes, malls, parking structures, libraries, hotels, transit centres, etc, and Ann Arbor will soon burn out.

Angry Moderate

Thu, Sep 13, 2012 : 8:55 p.m.

Don't complain that the campus isn't walkable and self-contained when you're afraid of new construction that would add housing to a walkable, self-contained area.

Veracity

Thu, Sep 13, 2012 : 7:41 p.m.

One purpose that you overlook is the profit that developers get when they are able to finance a large project. Since developers take their six or seven figure fees off the top of construction loans they have no financial risk, even if the project is not completely constructed or goes bankrupt after completion. None of the developers are required to invest any money into the project for the long term and so do not have any "skin" in the game. It explains why developers are always trying to build something in Ann Arbor, even if its not needed or desired (remember Valiant Partners?).

B2Pilot

Thu, Sep 13, 2012 : 3:47 p.m.

Is there a sculputure next to it?

A2comments

Thu, Sep 13, 2012 : 3:22 p.m.

The fraternity house "with the mudbowl" I believe is Sigma Alpha Epsilon, which was expelled by the University of Michigan after being suspended. Bulldoze it too...

Tom Whitaker

Thu, Sep 13, 2012 : 2:52 p.m.

Annarbor.com's poll, once again, misses the point. The question is not whether any large development should be allowed to be built anywhere, but whether the City should give this developer special treatment and allow him to build something 2.5 times taller than the zoning allows. The City worked for many years to develop the new downtown zoning districts and this owner/developer had a representative at all relevant meetings and hearings. The rezoning was done very deliberately, and the City rigorously followed the procedures prescribed in State law. South University received particular scrutiny during the planning and zoning process, with many compromises made along the way, but citizens, other property owners, and City officials were not convinced that this property should ever be anything but D2. The new zoning calls for very high density (D1) in the core--which includes most of South University from Forest to E. University--and also a less dense fringe (D2) that allows for a smoother transition from the lower density neighborhoods. This not only provides for a pleasing community aesthetic, but it also protects the rights of neighboring property owners living in 2-3 story houses from being cast into the shadows and wind from a mega-high rise right next door. It's too bad for this owner/developer that they didn't get it together to build something huge while the old zoning was still in effect, but they still have the right to develop the property to a very substantial degree. They should respect the community's wishes and adjust their plans to suit the zoning now in place.

Veracity

Thu, Sep 13, 2012 : 7:32 p.m.

I am glad that you point out what should be obvious facts and the most important argument against building the high rise, even more important than the possible financial failure of the project due to rental property saturation and overly expensive leases.

badboybobbybrown

Thu, Sep 13, 2012 : 2:21 p.m.

I for one am all for the construction of new taller buildings in downtown. I think it represents prosperity and the desire for people to live downtown. It's great for other businesses etc.. While I'm excited to see the completion of several new projects and look forward to future ones, I can't help to notice that all of these new buildings look remarkably similar. I'd like to see some variety in the city scape – I hope things downtown don't begin to look too cookie – cutter..

Veracity

Thu, Sep 13, 2012 : 7:27 p.m.

Your opinion will change as these buildings suffer from low occupancy and then enter bankruptcy. Building tall residential structures downtown is not like building that baseball diamond in "Field of Dreams." "If you build it, they will come" is from a movie and doesn't work that way in real life. Can you spell S-A-T-U-R-A-T-I-O-N and T-O-O E-X-P-E-N-S-I-V-E?

xmo

Thu, Sep 13, 2012 : 2:14 p.m.

More High Rises so more people can live in one of the "TOP TEN CITIES" in the US!

Lolly

Thu, Sep 13, 2012 : 2:02 p.m.

I think the article needs a correction. The Landmark building would be to the west and the mudbowl to the east.

Lizzy Alfs

Thu, Sep 13, 2012 : 2:22 p.m.

You're right, thanks!

DagnyJ

Thu, Sep 13, 2012 : 2 p.m.

How about a map with streets showing exactly where this would be in comparison to Zaragon, East U, Church, So Forest etc.?

Lizzy Alfs

Thu, Sep 13, 2012 : 2:22 p.m.

I can put a map in the story. Thanks!

justcurious

Thu, Sep 13, 2012 : 1:40 p.m.

Go for it. Who cares anymore. Tear down everything and build high rise buildings in their place. Cram as many people as you can into each square inch of the city.

Veracity

Thu, Sep 13, 2012 : 1:35 p.m.

Besides affecting the character and aesthetics of downtown Ann Arbor, other considerations for allowing further high-rise residential development includes the risk of exceeding the demand for rental units. With continued building saturation will eventual occur accompanied by bankruptcies. In a Paula Gardner article, entitled "Lender foreclosing on Ann Arbor's Ashley Terrace high rise; $20 million owed," published at annarbor.com on May 6, 2010, Ed Shaffran cautioned against overbuilding. In regards to condominiums he reportedly said "that the Ashley Terrace foreclosure appears to signal what he warned against: New construction downtown could only be built at a price that would effectively price a typical unit out of the range of most buyers." His comments apply to apartment rental units as well. "The pricing was high," Shaffran said. "Extremely high." Much of the cost covered the cost of construction, Shaffran said, which likely left the developers little room to negotiate a deal. With apartment rental costs regularly exceeding $1,000 per month, the number of potential leasers is limited. Nevertheless, other approved residential projects including the Village Green Ann Arbor City Apartments, Georgetown Mall, Varsity and one recently announced for South Main Street, will put over 1000 new apartments on the open market within the next couple of years. Competition for leasers will intensify as new units enter the market. Ann Arbor risks a plethora of bankruptcies within the next few years due to the failure of urban planning resulting from the City's governmental attitude of "build what you want and where you want."

Veracity

Thu, Sep 13, 2012 : 7:20 p.m.

GoNavy- It is sad if that is all you see downtown. When I walk the streets I see many three story buildings dating from the late 19th and early 20th centuries with attractive and distinctive facades. These are magnified by historical plaques showing early pictures with text descriptions of the older buildings along the streets. Also I enjoy the less crowded appearance of low profile buildings which allow me to see large stretches of blue sky and the sun. This experience is far different than what I experienced growing up in Chicago. Walking down Dearborn Street meant walking in the dark anytime of the day because the thirty-plus story buildings lining both sides of the street block out the sun except for ten minutes at noontime when the sun is directly overhead. What a dreary experience that was!

GoNavy

Thu, Sep 13, 2012 : 1:46 p.m.

"The character of downtown?" As in, vomit piles in the morning, trash cans knocked over, "lawns" that display the diverse weed population of Ann Arbor (complete with NY TImes & WSJ's piled up and never read), slum-like student housing with peeling paint, and a healthy smattering of low-end food joints? I say this because I'm a downtown resident, and that's what I think of when I think of the character of downtown.

MRunner73

Thu, Sep 13, 2012 : 1:29 p.m.

Is there really a need for another high rise? Is student housing that short of supply?

B2Pilot

Thu, Sep 13, 2012 : 3:36 p.m.

I believe prime student housing is seeing their occupancy rates at their other properties being effected and want to keep a piece of the action

MRunner73

Thu, Sep 13, 2012 : 2:52 p.m.

Logic is on your side. If it were my $50M, I'd think about another location, perhaps closer to the hospital or even North Campus.

GoNavy

Thu, Sep 13, 2012 : 1:43 p.m.

Do you believe that an investor is going to plunk down $50M in the "hope" that there will be demand for what he's building? Taking a punt on market demand with a $50M bet isn't the best way of doing business - So, my guess is that the guy has done at least some work.

PersonX

Thu, Sep 13, 2012 : 1:14 p.m.

What is the point of planning that involves quite a bit of community input if anyone who wants to make money can just overturn it? There are reasons for zoning and these reasons should be taken into account when such projects are considered. Not only is this building out of place, it seems, from the initial plans, to be ugly and unimaginative. Do we need another ugly, badly designed monstrosity? Are there any real architects out there left?

GoNavy

Thu, Sep 13, 2012 : 1:42 p.m.

Not only are there reasons for zoning, but there are reasons we allow for exceptions.

NoPC

Thu, Sep 13, 2012 : 1:14 p.m.

As a member of the real estate community, adding this many beds will, of course, increase supply, resulting in a decrease of demand for quality housing. When demand goes down, what happens to prices???? This will decrease the surrounding area market values. Even though the city would have a new source of property tax revenue from this new building, I wonder if the total net tax revenue would go up or down because of the decreasing market values of the surrounding properties???

GoNavy

Thu, Sep 13, 2012 : 4:21 p.m.

B2Pilot- As anybody who's familiar with a supply-demand curve can tell you, you're absolutely correct: A rise in supply, without a concurrent rise in demand, causes prices to fall. Similarly, a fall in demand without a concurrent decrease in supply will also cause prices to fall (your hotel example). However, what the OP stated was that "rising supply causes demand to fall," which not correct.

B2Pilot

Thu, Sep 13, 2012 : 3:45 p.m.

Go Navy over supply does affect pricing - how long has it taken the local hotel market to recover and how many hotels closed or went belly up before it reached bottom. There are consequences to oversupply- just sayin

GoNavy

Thu, Sep 13, 2012 : 2:37 p.m.

PS I'm shocked at the number of people who actually believe that increasing supply decreases demand. Goes to show that, even in a college town, there remain individuals living in the dark.

GoNavy

Thu, Sep 13, 2012 : 1:41 p.m.

Increasing supply does not cause a decrease in demand (the basic premise of your argument).

lindsay erin

Thu, Sep 13, 2012 : 1:06 p.m.

I give up, Ann Arbor. You win.

st.julian

Thu, Sep 13, 2012 : 1:06 p.m.

What happened to the liveable Ann Arbor that used to be owned by the residents. It's clear that the real estate developers are in control of council and future of the city. The DDA is clearly a tool of real estate interest and their syncopants.

Angry Moderate

Thu, Sep 13, 2012 : 8:51 p.m.

If the developers were controlling the city, this project would have gotten approved, wouldn't it?

Dog Guy

Thu, Sep 13, 2012 : 12:51 p.m.

A quarter of Gateway and Landmark renters will then have windows to peep; will the apartments with vistas blocked by the other building draw higher or lower rents?

Soulful Adrenaline

Thu, Sep 13, 2012 : 12:46 p.m.

I'm curious to see what will happen to the regular student housing market with all these high rises in place. Would that drive the prices down for your basic duplex? Force landlords to reconfigure / renovate and sell off to families?

B2Pilot

Thu, Sep 13, 2012 : 3:42 p.m.

I could be wrong but these real estate companies are not going to sell off their inventory. convert them from studnet housing to HUD rentals is my guess. The univerisity is beginning to see class sizes shrink so there are not any more students or professors flooding into A2

Lolly

Thu, Sep 13, 2012 : 2:12 p.m.

There is plenty of demand for residential (as opposed to student) housing south of campus. As a real estate professional, I can see gradual upgrading of the housing stock in that area as staff and faculty families push northward from Dewey, which is now the cusp of the student ghetto. To me, it makes sense to continue to satisfy the high demand for luxury student housing and "finish" S. University, a commercial street. It would be an additional boon to business on South U to have a few hundred more students passing the corner of Forest and South U twice daily.

GoNavy

Thu, Sep 13, 2012 : 1:02 p.m.

It will most certainly drive down the prices of Ann Arbor's current supply of slumlord-type dwellings. Only in a town like this can a landlord charge $700 a head for a dingy off-campus "house" with 8 people crammed into it. In the 1870's, many of these places would have been referred to as tenements and breeding grounds for cholera.

Mike

Thu, Sep 13, 2012 : 12:38 p.m.

I love how Ann Arbor wants more downtown living, is buying up all vacant land around the city to promote that, and then cries that the buildings are too big, too tall ad ruining the small town feel....... You can't have it all, especially if you want to have your preciuous mass transit sustem be viable. There needs to be gridlock and no place to park if you want mass transit to be more acceptable than driving your personal vehicle and be economically viable. If you want a smaller town then you have to allow urban sprawl, otherwise you have to deal with larger building and lots of congestion. Why can't all of the intellectuals see that?

Chase Ingersoll

Thu, Sep 13, 2012 : 12:29 p.m.

Precisely the appropriate location for such density, right on top of campus. It will add significant value to the surrounding properties and in its own right, dramatically increase the tax base. Please don't abuse or waste it....the tax base.

Peter Baker

Sat, Sep 15, 2012 : 1 a.m.

"what happens to the other Prime student housing properties sprinkled around the city neighborhoods?" Maybe they'll become homes for the people that graduate from UM and enjoy Ann Arbor's vibrancy enough to come back, stick around and contribute.

B2Pilot

Thu, Sep 13, 2012 : 3:38 p.m.

what happens to the other Prime student housing properties sprinkled around the city neighborhoods?? they are not going to sell them. Do they turn those into Section 8 housing How many more students are looking for rooms?? there is no shortage that I am aware of

LoveLife

Thu, Sep 13, 2012 : 12:15 p.m.

More high rises in the city. Keep them coming but don't live higher than the 2nd floor because if you do your taking a chance that the city's tallest ladder truck(s) will be in service. They do make great museum pieces, parked at the station.

Chase Ingersoll

Thu, Sep 13, 2012 : 12:31 p.m.

The new structures are built to the latest codes, which include sprinkler systems. They are 100s of times safer than the 100 year old fire traps that they replace.

Ross

Thu, Sep 13, 2012 : 12:25 p.m.

They just bought the brand new ladder truck that can go, what 14 stories? I know it hasn't been delivered yet, but still, calm down.

PhillyCheeseSteak

Thu, Sep 13, 2012 : 12:13 p.m.

In the smaller rendering, it looks like the building stands alone, with green space around it. How accurate is that?

zags

Thu, Sep 13, 2012 : 12:09 p.m.

"reinvigorate" is a code word for "These kids (parents) are a cash cow. I want in on the game". Also, the zoning is designed to blend the commercial and residential borders so you don't have a 150 foot building next to a two story. That's why there is a D2 zoning. If you grant a variance just so this guy can put more money in his pockets, then what is the point of having D2? A 60 ft building, aesthetically, would be a visual buffer coming in from Washtenaw. But as we have seen with the Fox Tent and Awning site, if you have enough money and influence, zoning restrictions are but a minor deterrence.

jpud

Thu, Sep 13, 2012 : 11:11 a.m.

Gordon Gecko's kids need a place to live when they attend UM.

jpud

Thu, Sep 13, 2012 : 10:15 p.m.

Demand for luxury student housing is not static. If you build the field of dreams, they will come. If there is an adequate supply of up scale housing, the composition of the University student body can . With greater luxury, the economic mix of the students at UM can shift too! Perhaps more of Gordon Gecko's children will choose to come here, and Michigan won't have to matriculate so many people who seek "affordable" housing.

GoNavy

Thu, Sep 13, 2012 : 12:59 p.m.

Have you thought to consider, just for a moment, the effect of having multiple high-rises (e.g. "supply") flow into the market (e.g. "demand")? Do you think that, with 5-8 high rises, each one will be able to charge $1,500 a bed - or (and this is a stretch, believe me) do you think that increased supply and competition in the downtown housing market will serve to drive prices down? Crazy thoughts...

A2comments

Thu, Sep 13, 2012 : 10:37 a.m.

How about showing a valid comparison to Landmark - feet to feet or stories to stories.

A2comments

Thu, Sep 13, 2012 : 3:16 p.m.

Thanks Lizzy! Seems reasonable to me then to put this next door.

Lizzy Alfs

Thu, Sep 13, 2012 : 1:28 p.m.

This is from Brad Moore, the architect for the project: the Landmark is 172'+/- tall the proposed Gateway would be only 145' or so with 12 stories

brimble

Thu, Sep 13, 2012 : 10:35 a.m.

Density is good. Except in my backyard or the stretch of a neighborhood I think has character. Given that students are going to live someplace, would it make more sense to put them in a multi-story building within walking distance of campus or out on South Maple in a residential neighborhood, from which they'll have to use buses and cars to get to campus? Simply saying "no" to all development doesn't work, so the question becomes one of choices.

brimble

Fri, Sep 14, 2012 : 12:13 a.m.

UM enrollment in the Fall of 2008 was 39,534. 2009 was 40,166. 2010 was 41,924. 2011 was 42,716. Numbers for the Fall of 2012 aren't published yet, but assuming that enrollment is static, there are some 3,200 more students in the market for housing than there were four years ago. The have to sleep someplace. Tom is correct: the city does not say "no" to all development. I did not mean to imply that the City does, but rather to observe that saying "no" to all development, as others in the comments on this article have advocated, is a false or impossible choice. As well, I agree wholeheartedly that establishing and abiding by good zoning and planning rules are critical to making for a livable city. Those choices must reflect, though, the reality that there is demand for housing, and that the demand forces housing either 'up' in density or 'out' in sprawl. We just have to collectively decide which is more desirable, and then manage the impact of our choices.

Tom Whitaker

Thu, Sep 13, 2012 : 2:47 p.m.

UM enrollment was deliberately reduced this year. UM administration admits that they overdid it on enrollment for a few years in a row, causing faculty and space crunches, and diminishing the quality of the undergraduate experience, so they are working to reduce numbers of students admitted. Employees will never live in these student buildings (except maybe work-study students or grad-assistants). It is ridiculous to claim the City is "saying no to all development." In fact, they are handing out tax credits and allowing developers to skirt the zoning on several current projects. This is obvious to anyone who is paying attention as new buildings are going up all over the place. Zoning exists to protect the rights, property values, and quality of life for all of us, and it needs to be respected.

brimble

Thu, Sep 13, 2012 : 2:17 p.m.

What alternative might folks like Tex propose? The simple fact of the matter is that the U is not enrolling fewer students or employing fewer people; it is growing the student and employee population. Those people have to live someplace. The demand for housing isn't going away. Those students and employees can live close to campus in a sustainable, walkable downtown, or they can live in rentals which permeate further into residential neighborhoods, or they can live in new developments at the edges (also called "sprawl"). The other alternative is that the UM can reduce enrollment, lay folks off, and contract the student and employee population. Since the last is unlikely at best, this is a simple pick-your-poison question.

Chauncey B

Thu, Sep 13, 2012 : 1:17 p.m.

LOL! Classic NIMBYism yo!

Tex Treeder

Thu, Sep 13, 2012 : 12:21 p.m.

"Some high rise is inevitable, so we might as well choose the least undesirable one." This is a false choice. Development like this isn't inevitable. There is no need for all of these high rise monstrosities being proposed around the city. This is clearly the time to say "No".

Stephen

Thu, Sep 13, 2012 : 12:14 p.m.

With all the break-ins taking place around campus, this seems like a good idea.