U-M signs deal to move into Liberty Lofts commercial space in downtown Ann Arbor
The commercial space of Liberty Lofts has been marketed to commercial tenants since construction started on the 68 condominiums in 2006.
Lon Horwedel | AnnArbor.com
The University of Michigan just signed a deal for one of the largest ground-floor commercial spaces in downtown Ann Arbor: Liberty Lofts.
The 19,600-square-foot building on West Liberty at First Street will be turned into space for so-far-unspecified architectural research.
With the deal, Ann Arbor’s largest mixed-use redevelopment project concludes.
“It’s a significant milestone,” said developer Ron Mucha of The Morningside Group, which bought the former industrial property from the Eaton Corp. and turned it into 68 condos in addition to the commercial space.
The College of Architecture and Urban Planning leased the building, which had been discussed for several years as one of downtown’s most viable options for larger-scale retail uses. Some ideas floated for the property over the years include a grocery store and a variety of collective marketplaces.
Yet its location just two blocks west of downtown - along with the proximity to the condos and Old West Side residences and 54 on-site parking spaces - failed to find a tenant.
The building - offered for sale at $3.9 million or lease over several years - drew much attention, real estate agents said.
At the same time, its attributes like the high ceiling and clerestory windows made it difficult to subdivide or retrofit for a specific use.
But it was those very qualities that appealed to U-M, Mucha said. The architecture school had leased the space for short-term uses before it evolved into its best option for the longer-term vision.
“What they value is the physical nature of the space,” Mucha said. “The high bays, the unencumbered nature of the space. There are no columns. It gives them a lot of flexibility to do a lot of research-oriented tasks.”
A U-M spokesperson said the architecture school continues to consider the specific use for the space.
“It will be used for architectural research,” according to an email response to a request for information. “…Architecture and Urban Planning is still working out the specific details to determine the exact use of the space.”
Morningside is seeking building permits to complete improvements to the building’s shell: Add bathrooms, fill in panes of glass, refurbish the fire suppression system.
The work should be done by Nov. 1, Mucha said.
The use of the building by U-M is not a service function for the neighborhood, “but it should be complementary,” Mucha said. Other Old West Side buildings - like the Argus Building - successfully integrate the business function in the largely residential area, he said.
U-M says it considered on-campus spaces before signing the 5-year deal, but none met the specific need.
The five-story Liberty Lofts condo portion of the development was one of downtown's first-completed projects after a wave of condo proposals that started downtown in 2004. While others - like Lofts 322 and Ashley Terrace - were new construction, the redevelopment of Liberty Lofts preserved the historic aspects of the former factory.
Meanwhile, downtown Ann Arbor's office vacancy rate at the end of 2009 was 16.58 percent, according to Swisher Commercial of Ann Arbor.
Michael Giraud and Tim Guest of Colliers International represented Morningside in the transaction.
Paula Gardner is Business News Director of AnnArbor.com. Contact her at 734-623-2586 or by email. Sign up for the weekly Business Review newsletter, distributed every Thursday, here.
Comments
BobbyJohn
Sat, Sep 11, 2010 : 8:47 a.m.
Hey Art, aren't you the architect for the building? It reminds me of the addition you designed for the Guggenheim!
John Alan
Sat, Sep 11, 2010 : 6:46 a.m.
I am very happy for the owner of the property to have it leased out. The hardest thing is to pay high property tax for years and have the building vacant there. Congrats and good luck. I do hope U-M stays there long so you can make up some of the losses that has occured over past years due to vacancy.
Stephen Landes
Fri, Sep 10, 2010 : 8:43 p.m.
Those of you who think that "something else" should have opened up in the space that the University has leased should have put your heads together, created a project, come up with the funding, and done something about it. If you think we need a grocery store downtown then go ahead and do something about it. These projects happen because someone with the entrepreneurial vision and drive did more than complain: they saw a need, had a vision, put their resources to work, and took a chance. That is called capitalism and it is what makes this country great. Government isn't going to make these things happen and neither will writing to the newspaper. Don't complain: DO
Art Vandelay
Fri, Sep 10, 2010 : 7:17 p.m.
So glad to hear this building will be occupied. I've driven past it daily for 6 years. As I understand it the historic committee insisted that it remain in its 1800's look so that Morningside, the developer, couldn't turn it in to a more useful building. The developer tried to lease it to grocery and other retail tenants and couldn't because of the limited parking (54 spaces for almost 20,000 square feet). They optioned or bought the eyesore of a gas station with the intent of turning it into parking and wanted to tear down the two remaining houses on the block but the historic commission, in their infinite wisdom, declared the houses invaluable. As a result the building remained unoccupied for the last six years and the gas station continues to be an eyesore. But I suppose the gas station is historic and should be preserved in its current state, too. Another grand success for the Hieftje regime!
Tom Joad
Fri, Sep 10, 2010 : 6:49 p.m.
Great looking building, but must be quite expensive to heat.
hoppy
Fri, Sep 10, 2010 : 5:36 p.m.
This is great but now they should focus their efforts on buying all the properties along South State Street and develop student housing that is appropriate for one of the major entrances to campus. Now there are fantastic athletic facilities on the west side and rundown, litter strewn properties on the east side. Quite honestly, the thoroughfare leading to a world-class educational institution should look better than that!
Steve Borgsdorf
Fri, Sep 10, 2010 : 4:28 p.m.
This is a great use of the property, far better than the nothing-at-all we've seen for several years, and it should seamlessly fit with the neighborhood. Plus maybe some of the architecture students can gaze out the window and figure out what the town should do with 415 West Washington. In response to a couple of other comments, I understand the deal to be a five year LEASE so it shouldn't impact the tax rolls, and the Pfizer property is to be used for biomedical research, so it may be an odd fit to send architecture students there.
Lokalisierung
Fri, Sep 10, 2010 : 4:17 p.m.
"Better than buildings sitting vacant, but only just." I'm with you. Would have liked to see somethign else in there but a building of that size in that location was going to be impossible to find a tenant.
Audion Man
Fri, Sep 10, 2010 : 3:40 p.m.
It is difficult to want to throw my hands up and cheer at this news. Basically, it is the same somewhat tired scenario that has played out so many times. I agree with Mr. Coffee that downtown could use a grocery store, or supermarket, or anything that would make living downtown more feasible and less reliant upon driving. Or- that space would have made for an interesting development like Columbus' or Milwaukee's Public Markets. But no. More generic University office space. I realize that the University contributes a lot to the city, but you'd think that will all of the commerical office space they consume, they would be doing more hiring, but the new space only results in the shuffling of deck chairs and nothing more. Better than buildings sitting vacant, but only just.
Bogie
Fri, Sep 10, 2010 : 3:37 p.m.
"Sign of the times" is correct. Maybe it is the "credit crunch" or another sign of the economic exodus of Southeast Michigan. Either way, it is disappointing to see things like this. The private sector is this area either "can't" or "won't" invest. Of course, with 38 pct of UM's budget being supported by taxpayers; they can invest. Maybe UM's money could be better spent, by holding down tuition.
Ed Kimball
Fri, Sep 10, 2010 : 3:37 p.m.
@trespass: I suspect the reason the U is not using the Pfizer space is because the Pfizer buildings are designed for biomedical research, which has very different requirements from architectural research. And, as Steve Burling noted, it is not obvious that the lease will be paid for by tuition.
Steve Burling
Fri, Sep 10, 2010 : 3:19 p.m.
Since UM is leasing the property, and isn't the owner, I think that the owner will probably be paying property taxes. And there's no guarantee that the funds to pay for the lease will come from the general fund, either. It could just as easily come from one or more research grants.
trespass
Fri, Sep 10, 2010 : 3:14 p.m.
Why isn't the UM using some of the Pfizer property for this? The UM said that one of the reasons they bought the Pfizer property was so they could save money instead of leasing other properties. Whatever they pay will come out of the general fund and increase tuition.
Momma G
Fri, Sep 10, 2010 : 2:48 p.m.
Let's hope the U of M hires a lot of people to work in this building that they won't be paying property taxes on and that they don't charge the employees an arm & a leg to park!
Paula Gardner
Fri, Sep 10, 2010 : 2:34 p.m.
This lease is probably a sign of the times - the economic downturn made it a lot harder for a retailer to take a chance on a non-traditional downtown location, especially of that size. But over time, after this lease ends, there could be potential for more of a service-oriented business here. More downtown development projects could take hold (like Village Green) giving more of a residential base for a market, etc. U-M isn't saying how many employees will be in the building, if they even know yet. But those employees, and visitors to the building, should still add to the downtown economy. That's one reason that i just added the office vacancy numbers to the story.
rusty shackelford
Fri, Sep 10, 2010 : 2:30 p.m.
I agree, it's too bad nobody could get things together to make it something that would serve the neighborhood more directly. (A smaller scale Russell Industrial Complex would have been aweseome.) At least it isn't sitting empty any more though.
My2bits
Fri, Sep 10, 2010 : 2:21 p.m.
People often overlook how much the University spends in this town and instead focus on the fact that the U does not pay property taxes. This is one of many commercial spaces that the U leases in town. I hope people can see what a benefit our 600 pound gorilla is to our town. GO BLUE!
Robert
Fri, Sep 10, 2010 : 2:18 p.m.
That's too bad. We really could've used a bigger supermarket downtown.
LA
Fri, Sep 10, 2010 : 2:17 p.m.
Sounds great!