Tax foreclosure auctions end Wednesday for Wellesley Gardens condos and Milan development property
Paula Gardner | AnnArbor.com
Undeveloped and approved land in the Wellesley Gardens condos in Pittsfield Township and Uptown Village in Milan will be available to the highest bidder through early afternoon on Wednesday on Bid4Assets.com
The two development parcels reflect how much demand once was forecast for new construction in Washtenaw County.
And the results of the auction may forecast the county’s development trends for coming years.
Wellesley Gardens is a 427-condo project located on Michigan Avenue west of US-23 in Pittsfield Township, where 206 units were built.
And Uptown Village once was part of a wave of residential development in Milan, where in 2003 at least 1,000 new homes were in planning in Milan, York Township and Monroe County’s Milan Township.
The community - which straddles the Washtenaw and Monroe county border - had been targeted for growth due to its location near US-23 south of Ann Arbor and near Dundee.
Besides the 304-home Uptown Village subdivision on Arkona Road developed by Delcor, the project once had a commercial portion with 190,000 square feet of retail space. Unconfirmed rumors from that area kept rising that Kroger Co. was considering the shopping center.
“This is a quality growth area,” said Charles Bludworth, vice president of development for Ramco-Gershenson Inc., at the time. “There are a number of retailers who would want a presence there.”
But the pace of home sales in Milan never caught up to the projections. In August, 8 homes and 0 condos sold in the Milan Schools, according to the Ann Arbor Area Board of Realtors. The average list price on those 8 homes: $93,675.
In Uptown Village, lots have been listed for sale at $5,000. And recent home listings - not foreclosures - show a three-bedroom, 1,970-square-foot house for $150,000.
In comparison, the Ann Arbor area condo market is more robust: 44 units sold in August. However, that number is down from 55 a year earlier and down from 97 in August 2005. The average purchase price is $154,971; in 2005, the median purchase price was $184,900, according to AAABOR.
Some of the existing condos in Wellesley Gardens were among 516 condo building permits issued in Washtenaw County in 2005. From 2000 through today, building permits have been issued for just less than 3,000 condos in the county.
Today, the existing condos are listed in the $109,000 to $125,000 range.
A developer buying the 33 undeveloped acres could build 218 condos already approved, or come up with a new plan for the land, zoned for multifamily use. The property is in the Ann Arbor school district and has an Ypsilanti mailing address.
Development land in the Ann Arbor school district once sold at a premium and it still holds up relatively well today, after the housing downturn.
But the key to that is “relatively.” Several unfinished projects could be described as troubled, even as some construction rebounds in pockets.
Meanwhile, the cost of each project is a relative bargain, too. At Wellesley Gardens, the $1.2 million cost represents a significant carrying charge, presuming years before new construction is viable there.
And the Uptown Village minimum bid of $193,327 is $6,236 per acre. Once carrying costs, roads and improvements are added, that’s close to the most recent market price of $5,000 per Â¼ acre homesite.
County Treasurer Catherine McClary has said the pricing reflects the back taxes owed and fees associated with the auction, not speculation of value.
But whether any bidders bite on the deals - and the risk associated with owning vacant development land - remains to be seen on Wednesday afternoon.
Meanwhile, the third online auction in this week’s offerings is for 63 non-contiguous units at Liberty Square condos in Ypsilanti Township.
The minimum bid is $299,926, and the buyer will have to demolish the units.
The township has condemned the 151-unit property, and now appears headed to court due to owners’ violations of orders to repair or demolish the units.