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Posted on Wed, Mar 10, 2010 : 4:36 p.m.

Ypsilanti officials meet with Beal to reach Thompson Block agreement without litigation

By Paula Gardner

Ypsilanti officials and the owner of the fire-damaged Thompson Block met this week to consider the next steps for the building.

The meeting between owner Stewart Beal and City Manager Ed Koryzno took place Tuesday, a week after a contentious City Council meeting that resulted in a 4-3 vote directing the city attorney to start proceedings to force Beal to remove support beams from the streets adjacent to the building.

No legal action has been filed, Koryzno said today.

Instead, Koryzno is working on a revised agreement with Beal for removing the support systems from the city’s right-of-way, along with meeting deadlines on other aspects of the building’s rehabilitation, including posting a performance bond.

“Discussions are ongoing,” said Mayor Paul Schreiber. “I think we’re going to see another proposed agreement that council can consider in lieu of going to court.”

The issue has been accelerating for some residents and officials after a fall fire destroyed a portion of the 30,000-square-foot building. Due to the building’s historical significance as a former Civil War-era barracks, Beal sought to preserve the façade and erected a complex system of scaffolding to stabilize it.

However, that scaffolding extends into North River and in the right-of-way on the Cross Street side of the building. And with financing unavailable to do the full restoration, Beal told the city he needs more time before he can remove the building supports.

City officials said the scaffolding violates city nuisance ordinances.

“There are still some points we can’t agree on,” Beal said of the meeting with Koryzno. “… But we’re closer to agreement than before.”

Beal said he hopes to restore the north section of the building and bring a bar tenant into the space. The rental income should help him obtain financing for the rest of the property, he added.

“Now, no one will do construction financing,” he said. “But they’ll loan on a performing building with a tenant.”

If Beal and Koryzno come to an agreement, it likely will come to council in April, the city manager said.

And if negotiations stall, council already has authorized the legal action.

Schreiber said he hopes that can be avoided.

“It’s an important piece of property event though it’s severely fire damaged,” Schreiber said of the property.

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

Johnny

Wed, Mar 10, 2010 : 10:04 p.m.

Kmacker- Mr Beal DOES SMOKE and he drives a truck! He may drive a Focus but he drives a Ford Truck most time. as far as 44 of 47. You are dead WRONG!! 9 of them my personal friend sold his DAD! in which he has now! as far as credit goes, we were in recession BEFORE the building burned. He knew regardless, it would require Millions to renovate. Sounds like YOU nevermet him! I know him!

M.

Wed, Mar 10, 2010 : 9:16 p.m.

kmacker - I can't comment on the smoking since I doubt he'd light up while meeting with a tenant, but he definitely drives one of the Beal trucks frequently. However, the statement about "seeing it in his eyes" and all that BS was going quite far in assuming things.

kmacker

Wed, Mar 10, 2010 : 8:56 p.m.

Mr. Beal drives a focus, doesn't smoke, bought 44 of his 47 properties on his own, lives in MI so is held up by the commercial financing halt that all investors are experiencing, and is the definition of success as defined by your post: "When you go out and work a 9 to 5 and invest your own cash and take a risk, that is success." Sounds like you've never met him.

a2grateful

Wed, Mar 10, 2010 : 8:10 p.m.

Sorry to report that there has been no commercial money available in MI for over a year. We are redlined due to declining property values. There likely won't be any commercial lending here for over another year. Although you may wish to blame and badmouth Beal, he has nothing to do with the collapsed commercial credit market. It's a tragic situation of monumental proportion for Beal and every commercial investor/property owner in the State of MI.

Johnny

Wed, Mar 10, 2010 : 8:01 p.m.

I truly believe that Mr Beal will not be able to get this project going. Keep in mind he has inherited a good 90% of his assets. Its not like Mr Beal is some Property phenom who has worked his way to the top. He is probably already Overextended in credit already and I doubt he has "cash on hand" to even come close to beginning this project. The City and Mr Beal can have all the meetings they wish but until construction begins which I highly doubt- it will continue to sit and be an eye-sore. It will come down to the city taking over it and using tax payers dollars to demolish it and sell the lot, hoping someone with MONEY can do something. As far as Mr Beal goes, he shoiuld quit stalling, come out and say he does not have the funding and does not see any funding coming his way any time soon and go to the next step. But we all know this will get dragged out. I saw Mr B the other day, smoking his cigarette sporting a rugged unshaven look the other day in his truck. One glance at the man and you could see in his eyes and face that he knows all of this is gonna catch up with him. It will be revealed that he is not some big hotshot property mogul who has came so far for being so young as the local media has made him, or he has made himself out to be. Anybody could do many things if they happened to inherit assets and a lot of them. When you go out and work a 9 to 5 and invest your own cash and take a risk, that is success. The Thompson building is now in control of a true greenhorn who doesnt have a clue what he is going to do except stall, and talk to talk. We all know he will not be able tocome up with the funding PERIOD. Time will prove me right and so far Im nailing it on the head

tdw

Wed, Mar 10, 2010 : 7:44 p.m.

@miatamich If you are correct its starting to make sense as to why hes doing this.I never belived for a second that he was doing it to "preserve history" or doing something "good"for Ypsi

miatamich

Wed, Mar 10, 2010 : 7:36 p.m.

I believe Beal gets around $1.5M in grant money if they restore the building and keep the facade intact. That's the primary reason they have any interest in this building. I don't they anticipated that loan dollars would dry up and now they're in a bind.

Peter A Webb

Wed, Mar 10, 2010 : 6:13 p.m.

I can't comment on the odds, but it will surely be a benefit to the community if it can be completed. I hope a mutually beneficial agreement can be negotiated outside of court. If they go to court, no matter which side prevails, money will have been spent that could have been put to more productive use.

tdw

Wed, Mar 10, 2010 : 6:07 p.m.

I'll take the over as in It'll never get completed