MAVDevelopment buys ex-Proquest HQ at I-94 and Zeeb Road in Scio Township
MAVDevelopment, an Ann Arbor-based real estate development company, finalized a deal Friday to purchase the 71.5-acre former ProQuest headquarters at the northeast corner of the interchange at I-94 and Zeeb Road in Scio Township.
The 180,000-square-foot office building and warehouse was most recently occupied by National Archive Publishing Co.., which was sold by a lender to Detroit-based Superior Capital Partners LLC in 2009.
Photo from loopnet.com
The site — which has been noted for its potential for retail development and was once looked at by Costco — was most recently listed for $2.5 million with John Fricke, Grant Bruce and Jay Chavey of Signature Associates.
After purchasing the property last week for an undisclosed price, MAVD now plans to develop it based on market demands, said vice president Jeff Harshe.
“First of all, we’re going to gauge the market a little bit, but I think in the long run we’ll end up knocking down the building,” he said. “Its highest and best use is a development site and our focus is on office.”
He added: “A corporate headquarters or some kind of office development of that nature seems to make the most sense.”
MAVD’s portfolio includes various office developments in Michigan and Colorado. The company developed the South State Commons buildings on South State Street in Ann Arbor and the Market Place building on Detroit Street in Kerrytown.
The company also owns 110 acres at the southeast corner of the Willis Road interchange on US-23 in York Township. The land has since been rezoned to provide approval for up to 1 million square feet of development.
Harshe said MAVD’s acquisition focus over the past five years has been primarily in Colorado, but the company had been considering the “next natural place to grow” in the Washtenaw County market.
The Zeeb road site, he said, “just made sense.”
Harshe cited the traffic counts, the site’s accessibility, the interchange, the drive time to downtown Ann Arbor and the potential for development as appealing aspects of the property. He also noted that it has an Ann Arbor mailing address with Scio Township taxes, which are less than the city of Ann Arbor.
The total non-homestead millage rate for businesses within the Ann Arbor school district in Scio Township is 43.5235 mills, according to the state. The rate in the city of Ann Arbor is 58.8939 mills.
Of the 71.5-acre site MAVD purchased, only about 30 acres that fronts Zeeb Road and I-94 and the far east end of the property would allow development due to flooding concerns.
Harshe said the more than 40-year-old building has good elements, but has been neglected for the past few years - leaving the option of leasing it a possibility, but not ideal.
“We’re not opposed to leasing the building, but I think that has been explored pretty thoroughly and that won’t be our primary focus.”
He added: “We’ve looked at the site as if it were vacant, zoned and ready to start developing. We can then modify it to a potential user.”
The Scio Township property was originally put on the market for $7.5 million, but Superior Capital Partners LLC dropped the asking price to $4.4 million in 2009 due to a “soft” market for commercial property.
The property was assessed at $2,266,400 in the 2010 tax year, making its estimated market value about double that, according to township documents.
Fricke said the property “hit the market right at the bottom of the financial meltdown in real estate markets.”
The listing price was then lowered to $2.5 million, or $13.89 per square foot, and Fricke said Signature received a good deal of interest from different users.
“We presented it to most of the logical candidates in Washtenaw County, both large users and institutions and developers,” he said.
Fricke, who said he had discussions with Costco about the site in past years, said both retail and office developments are “viable options” for the site.
“Obviously, Scio Township will be the most significant component of determining that long term. I’m sure the new owners will be exploring any and all opportunities in both those categories.”
The property is zoned I-1, Limited Industrial, for industrial and office use.
To develop the property for retail use, the site would likely have to be rezoned, said Spaulding Clark, Scio Township Supervisor. He said the township is currently conducting a study to look at development possibilities and traffic flow in that corridor.
Clark called the news of the property sale "encouraging in this current economy."
"It's certainly encouraging to see that someone sees some potential in that property," he said.