500 new jobs: Where could Barracuda find a 100,000-square-foot office in downtown Ann Arbor?
It’s easy to celebrate upon hearing the assertion from Barracuda Networks that it wants to hire up to 500 new employees and acquire or build a 100,000-square-foot office in downtown Ann Arbor.
After all, said Downtown Development Authority Director Susan Pollay, “we’d love to have them.”
Would Borders shrink its downtown Ann Arbor store? If so, that could present an office option for Barracuda Networks.
Melanie Maxwell | AnnArbor.com
But it also begs the question posed by developer Ed Shaffran: “Where are you going to find 100,000 square feet?”
And even if they could, would it even fulfill the California company's vision of creating a campus?
Pollay, moments after hearing the news, expressed confidence that a solution could be reached. “We’ll work it out,” she said.
Yet a look at what’s available downtown, both existing properties and potential redevelopment sites, shows that most options will require some effort.
Ann Arbor does not have a building with 100,000 square feet available - and even few office buildings have that much space.
Just how big is that? Picture the One North Main office building. That’s close. Or 301 E. Liberty, which is about 77,000 square feet. The former Ann Arbor News building, one of the biggest office deal downtown in recent years, is 58,000 square feet.
So Barracuda’s stated goal represents a small slice of the downtown office market when looking at existing buildings with leasable space.
“Where would you put 500 jobs in downtown Ann Arbor?” asks Jeff Hauptman of The Oxford Cos. “We don’t have that kind of vacancy downtown.”
That’s not to say Barracuda and the company's broker, Jim Chaconas, couldn’t quietly approach owners of buildings with an offer to purchase. If that offer includes a buy-out for existing tenants, a deal could happen.
A deal also could be possible at the former Borders headquarters on Maynard Street, where 48,000 square feet has been vacant for years. If Borders chose to downsize or close its store on East Liberty, it could add contiguous space to add to that office space.
Then there’s new construction.
The ex-Ann Arbor News building was bought by the University of Michigan Credit Union in one of the largest office sales in recent years - but it's still smaller than what Barracuda says it wants.
What kind of building sites might be under consideration?
There are a few: the single story building west of Sloan Plaza condos on East Huron is marketed for a high-rise redevelopment. The vacant lot north of Bank of Ann Arbor, where 80,000-square-feet can be built. A former lumber yard on North Main near M-14 (which could offer interesting potential to capitalize on the Huron River).
Then there are previous development plays that were envisioned for something else: The former Greek Church on North Main, where the site plan for The Gallery condos soon will expire; the hotel plan for South Division; the block on South Ashley where Joseph Freed & Associates once envisioned their next project.
And speaking of Freed, could Barracuda bring the former Glen Ann Place back to life?
The most obvious building sites are owned by the city, including The Library Lot. And while it’s possible that Barracuda could successfully take a run at one of them, Pollay said it’s not likely to result in a deal.
The city is preparing to formulate a plan for selling them, an effort that could take some time.
“(Barracuda’s timing) is far more immediate than anything we’re going to be able to respond to,” Pollay said.
Hauptman cautions that new construction is expensive - that’s why developers have abandoned it, save for a few projects. In today’s market, he said, rents would have to go up by about 25 percent before it makes financial sense to build instead.
And the sheer size, roughly one-fourth of a city block, will be a challenge.
“It will make more sense to see them go into something existing,” Hauptman said. “There are just not a lot of buildings (that big).”
Paula Gardner is News Director of AnnArbor.com. Contact her at 734-623-2586 or by email.
Comments
Vince Caruso
Sat, Jun 18, 2011 : 3:07 a.m.
The City Yard is in the Allen's Creek floodway. The city has not wanted to do a meaningful study of the watershed because they are afraid to know the extent of the problem. The floodway could be (probably is) 3-5 times wider than the current maps based on 1968 data show. The homeless shelter initial plan was scraped at great cost and time loss due to a resident showing it was in the Allen's Creek floodway even though the excerpts and planners said it was a Great Location. New residential building is not allowed in the floodway. Lets do a study and let the facts guide our plans not hopes and dreams. No more unsuspecting people in harms way. A Greenway in the floodway/floodplain would prove a great environmental and economic boon for the city, just ask the other 5-6 communities in Michigan that have build them in their floodplains the last ten years. Just one benefit would be to reduce the size of the floodplain and save countless homes and businesses from flooding.
David Palmer
Thu, Jun 16, 2011 : 1:31 p.m.
Maybe Ypsilanti is a better fit? I would second Galielo2000's comment. A 100k sf building would fit nicely on Water Street, there is plenty of room for a campus development in a walkable downtown. I'm sure there would be more investment in restaurants and other service businesses in Ypsilanti if there were 500 high-tech jobs and their expendable income on their way to Ypsi. It would be really fantastic to see a new mix of people shopping at the Downtown Ypsilanti Farmer's Market, and frequenting places like Beezy's, the Bomber, Dalat, Sidetrack, Aubree's and the Corner Brewery. If the Recreation Center concept comes to fruition, then it would make one heck of a change for the downtown dynamic of the city, not to mention other high tech companies would want to fill other smaller office spaces in Ypsi with an anchor employer like Barracuda in the area. Oh yeah... there is the river and giant parks north and south of a proposed "campus" that A2 doesn't have downtown. Plus the affordable homes within bicycle distance of said development location. Not to mention an astute real estate developer knows the Ypsi doesn't exactly have anyone rushing to the door to develop that property and a deal is ripe and ready to pick.
Thomas
Thu, Jun 16, 2011 : 12:23 p.m.
Buy the 38+ acres of Water Street in Ypsi. They could put an entire campus there, designed completely to their specifications.
Thomas
Thu, Jun 16, 2011 : 8:08 p.m.
Yes, in Ypsi. So?
Arboriginal
Thu, Jun 16, 2011 : 12:50 p.m.
....in Ypsi.
goingfast3579
Thu, Jun 16, 2011 : 3:56 a.m.
no new building must use existing propertys and hire locals first all comments are great
CynicA2
Thu, Jun 16, 2011 : 2:28 a.m.
... wondering if people in this town will ever learn to stop counting the chickens before they hatch? If Google is any indication, we might, ultimately, end-up with 100 or so new jobs. Or not. Remember the last "tech bubble"?
nunya
Wed, Jun 15, 2011 : 11:38 p.m.
Don't they already have offices next to the train station? There is a lot of underdeveloped property near there. And, to an out-of-towner, that could still be considered downtown Ann Arbor area. Seems like that is more likely. The building they are in is a very unique structure and I would hate to see it go empty. I can certainly imagine an expansion that would take over the corner of Depot and Main. Of course they might have to take over Peter Allen's offices. What do you think Peter? Also, what about the property behind them on the other side of the railroad tracks? I wonder if they could build a crossover the railroad to connect a campus.
Cathie
Wed, Jun 15, 2011 : 11:02 p.m.
Why does Barracuda specify in downtown Ann Arbor?
Jon Gordon
Wed, Jun 15, 2011 : 7:23 p.m.
The former Jacobson's building, now partially used by Border's, is 120,000 square feet if the space on Maynard Street is utilized.
cfsunlet
Wed, Jun 15, 2011 : 7:20 p.m.
okay, here's a plan--take over the 48,000 feet within the Borders building for now. Build a beautiful campus in the Library Lot. You can have an open air public space, public shops on the ground level, parking below and a beautiful 100,000 sq ft building above that meets your needs. Baracuda can be at the heart of Ann Arbor.
David Paris
Wed, Jun 15, 2011 : 4:16 p.m.
My guess is that the best place for Barracuda is the Argus Building. I'm sure that UMich has thought about vacating at least parts of that complex as they shuffle occupants into the NCRC. That would also eventually add tax dollars which are so desperately needed.
Dave
Wed, Jun 15, 2011 : 8:33 p.m.
MyOpinion: I'm a young person in IT (like Barracuda) whose company is also looking for a new office space in downtown Ann Arbor as well, albeit, we're significantly smaller (30+ people). Let me make a point that just cause people are 'young' doesn't mean they can just walk or use city transit [the latter which lacks considerably]. Simply speaking, *walking sucks*. The company will want access to parking. We should develop better underground parking structures or greatly invest in/improve city transit. The latter is expensive for taxpayers, and unless is very well-planned, wouldn't not provide ROI. All the same, if you can't provide a convenient way for this employer to make a home here, they will leave for greener pastures.
MyOpinion
Wed, Jun 15, 2011 : 8:15 p.m.
Lack of parking at Argus is less critical for this organization. Sounds like lots of young people; walk/bus or park in a city owned structure and walk from structure. We need to get away from parking plazas and a building in the middle. If the want that, go to the outskirts of town.
seldon
Wed, Jun 15, 2011 : 5:38 p.m.
There's almost no parking at Argus, and the parking situation in the neighborhood around it is hellish.
blahblahblah
Wed, Jun 15, 2011 : 3:28 p.m.
In less than five years, Ann Arbor has lost it's two largest private employers (Pfizer and Borders - soon to be gone), not to mention many other public and private jobs. Like it or not, our city leaders need to be prepared and totally committed to compete with other municipalities/townships for these jobs. The sudden lack of large private employers in a city of our size should be ringing some alarm bells!
Paula Gardner
Wed, Jun 15, 2011 : 3:27 p.m.
Ah, Lower Town and the ex-Pfizer site are interesting, as well. So is the city-owned lot on North Main. The Borders HQ cams up in my reporting yesterday. It's too large, so the company's option would be either to buy it and find a tenant for the rest or lease part of it, even though they'd prefer to buy. I'm also hearing the location wasn't a good fit.
Thomas
Thu, Jun 16, 2011 : 8:07 p.m.
And Water Street in Yspi! Downtown Ypsi is close to Ann Arbor, Metro Airport, Detroit, there's plenty of parking, plenty of local housing, and it's two blocks from the AATA Ypsi Transit Center. There are 38+ acres just waiting for a company like this. They'd be located right on the Huron River.
PLGreen
Wed, Jun 15, 2011 : 3:23 p.m.
The City could sell Barracuda the new underground parking garage, and Barracuda could build their builidng on top of it. They would have parking and their builidng. Additionally the City would unload a "white elephant"
Elaine F. Owsley
Wed, Jun 15, 2011 : 3:20 p.m.
It's not downtown, but what about the former Borders headquarters? Lots of parking there.
Grumpy
Wed, Jun 15, 2011 : 3:15 p.m.
Someone should proofread this article. There are numerous typos and a run on sentence.
Bonsai
Wed, Jun 15, 2011 : 3:13 p.m.
A sad admission from Susan Pollay -- the city and DDA are too slow to accommodate this opportunity? I guess we'll have to wait till the next company that needs 100,000 square feet for 500 employees comes along.
DaLast word
Wed, Jun 15, 2011 : 3:13 p.m.
How about Borders world headquarters on Varsity drive, off Elsworth.
Ryan Tobias
Wed, Jun 15, 2011 : 3:01 p.m.
Although there are clearly some quality fits outside of downtown including the former Borders space and Pfizer Campus, I would love to see them downtown and I think it would be a huge benefit both to them and to the city of Ann Arbor for them to do so. Suburban corporate campuses are rapidly fading in favor as young professionals want to be in urban, walkable environments (see recent Crain's report on the subject: <a href="http://www.chicagobusiness.com/article/20110528/ISSUE01/305289984/crains-special-report-corporate-campuses-in-twilight)" rel='nofollow'>http://www.chicagobusiness.com/article/20110528/ISSUE01/305289984/crains-special-report-corporate-campuses-in-twilight)</a>. Sean Heiney refers to a campus atmosphere a la Silicon Valley but I believe this can be accomplished in a more vertical style downtown just as well as it can on the edge of town. In response to Vivienne, 300-500 workers downtown brings retail. It brings a need for more housing as workers want to live closer to the office and it brings additional jobs. Regardless this is positive for Ann Arbor but I think it makes the biggest impact downtown. I'm surprised no one has brought up the site that First Martin Corp (Barracuda's current landlord) owns downtown. The full city block bordered by Huron, First, Ashley and Washington has been a surface parking lot for years and would absolutely accommodate 100,000 plus parking and other uses.
Mike D.
Wed, Jun 15, 2011 : 7:30 p.m.
Good point Vivienne. Manhattan, with all its large, monolithic buildings, is really a dead zone. Nothing vibrant about that place. On the other hand, look at Dexter, MI, with cute, small buildings. Now that's a hotbed of activity, day and night!
Vivienne Armentrout
Wed, Jun 15, 2011 : 3:30 p.m.
I don't see how a huge monolithic building (apparently even the Ann Arbor News former headquarters is too small) enhances the vibrancy of downtown. And I don't see a quick answer on the parking. Not all employees will live downtown and not all will want to use the excellent getDowntown program.
demistify
Wed, Jun 15, 2011 : 2:57 p.m.
It is quite clear from the article that there is no pre-existent facility in or near downtown Ann Arbor that satisfies the requirements. Building one within the jurisdiction of the City of Ann Arbor is pretty much hopeless, given the track record of harassment and inconsistency in zoning and "historical preservation" regulation, plus the active hostility to allowing an adequate amount of parking space. Part of the former Pfizer site would be suitable. Most likely, if they are to come to the area at all, they will build in one of the townships. In any case, it is unlikely that the City will get any property taxes out of this.
Veracity
Wed, Jun 15, 2011 : 2:47 p.m.
Sorry, Dan. I did not see your comment before submitting mine and am gratified that someone else considers the former Pfizer site as an opportunity as well.
Veracity
Wed, Jun 15, 2011 : 2:42 p.m.
Would the University of Michigan be willing to lease 100,000 sqft of space within its Pfizer complex which comprises 2,000,000 sqft in Northeast Ann Arbor ? On-site parking is plentiful and transportation downtown is convenient. The Pfizer site is attractive and may still have its cafeteria if that would be useful to Barracuda. Shopping, restaurants and hotels are close-by as well.
DAN
Wed, Jun 15, 2011 : 2:41 p.m.
Is there current space on the former Pfizer property? This would be better than potentially 500 cars downtown. I recall that Pfizer was adding a new building when they decided to close the facility and that land is available. It would also put that rart of the property back on the tax rolls.
PhillyCheeseSteak
Wed, Jun 15, 2011 : 6:01 p.m.
Dan, the entire Pfizer property was purchased by the University of Michigan and they have plans for all the space.
Arboriginal
Wed, Jun 15, 2011 : 2:16 p.m.
Arrowwood Hills Cooperative is a large acreage on the edge of town that is easily accessible to major freeways. Make an offer!
Peter Allen
Wed, Jun 15, 2011 : 2:07 p.m.
I think that the vacated city maintenance yard at 721 N Main would be ideal. It's walkable to Kerrytown area and downtown, has room for 100,000 sf on 3 floors with parking beneath, cleans up an eyesore, generates cash to the owner, the city. It will sparkplug the site's cleanup, the bulldosing of the decrepit buildings and an anchor to help make the Allen Creek Greenway come alive. Might even find a way to put a drop down RR crossing gate and end that infernal horn blowing at 3-5 am! Peter Allen
Chase Ingersoll
Wed, Jun 15, 2011 : 7:30 p.m.
zero for 2 Vivienne.
blahblahblah
Wed, Jun 15, 2011 : 4:24 p.m.
Barracuda's current office (on stilts) is in the floodway and even with the recent flooding of their parking lot, there was no significant damage I could see. Something similar could be built on a "portion" of the maintenance yard. The land is too valuable to give away the entire parcel to the Allen Creek Greenway.
Vivienne Armentrout
Wed, Jun 15, 2011 : 3:26 p.m.
Uh, Peter, what about the very substantial Allen's Creek floodway through that area? A big part would have to be excluded and really we should not encourage building on the floodplain either.
blahblahblah
Wed, Jun 15, 2011 : 2:39 p.m.
This makes sense, but as you know working on a city lot opens up a whole can of worms. How about combining your North Main property with some of your decrepit neighbors to the west and south? Combining your three properties would provide the space, as well as create a better access point to Bluffs park and a more appropriate gateway to the city on N. Main.
BernieP
Wed, Jun 15, 2011 : 1:53 p.m.
Brownfield @ Broadway / Maiden Lane - COULD BE purpose built for a Barracuda campus to hold 500 people with parking, shopping, etc, etc. Bonus is that it is within walking distance of AATA stops from the park & ride at Plymouth / US23. With the vacancy rate high financing such an endeavor might be a challenge. ( No consulting fee on my part to any of parties with vested interest ).
Andy
Wed, Jun 15, 2011 : 4:20 p.m.
Could not agree more. That lot is massive and Lower Town desperately needs the help. Would likely be a lot cheaper than downtown real estate while offering access to the riverside parkland and, as you noted, the #2 bus. And the most immediate neighbors on 3 sides are either commercial, rental housing, or university parking. Not quite as glamorous as downtown, but certainly better than developing on the city's outskirts. The biggest problem would probably be opposition from homeowners on Broadway, but steps could be taken to minimize adverse impacts on their neighborhood.
blahblahblah
Wed, Jun 15, 2011 : 1:48 p.m.
Barracuda is a fish so naturally they should be located near water, close to the river where they are located now (sorry no saltwater though). But seriously, if the company really wants to plant deep roots in Ann Arbor and spend the extra money on new development, the North Main corridor along the river could offer the potential for the office space, parking and a "green" campus. Otherwise, it sounds like the downtown Borders space/Tally Hall combo would be the only option for existing space downtown. Good luck Barracuda! I hope you can manage to stay in the downtown area.
Vivienne Armentrout
Wed, Jun 15, 2011 : 12:54 p.m.
And how many employee parking spots would they want to move downtown? Google was enticed to come downtown by giving them free parking (actually the city is paying for them). We don't have any more parking to give away and no money to pay for them. Look at the enormous expense we are going to in order to build an underground structure at the Library Lot. Meanwhile we are talking about removing parking elsewhere by building on city lots. I question that a huge corporate campus adds much to downtown. Corporate buildings tend to be dead zones. We need more retail. If they want a large headquarters with a green lawn, I understand that Borders is vacating its HQ on South State.
Chris Ward
Wed, Jun 15, 2011 : 2:45 p.m.
Yes, but those retail stores and restaurants needs regular customers and this is it.
Galileo2000
Wed, Jun 15, 2011 : 11:47 a.m.
Barracuda should check out the Water Street land in Downtown Ypsilanti, the best available property around, with EMU not too far away, great access to the highways, affordable housing, and located right between Depot Town and the Historic Downtown. Plus it is right on the Huron River. Come on over Barracuda and check it out! Ann Arbor is so congested and hard to get too plus parking ... OMG! Downtown Ypsi is closer to the highways, to Metro airport, to Detroit for sporting events, and for those who still want to go to A2, it is just 10 minutes away. Again, come on over!!!
JB
Wed, Jun 15, 2011 : 2:25 p.m.
What a fantastic idea! Sadly, this company doesn't strike me as one that would "believe" in Ypsilanti. Snobbery abounds, and when trying to attract out-of-area talent...Ypsilanti may be a hard sell. I would openly challenge a company like this to do something for a community that deserves it!
A2comments
Wed, Jun 15, 2011 : 10:38 a.m.
If they want a true "campus", with outdoor areas, grass, trees, etc., then they'll end up outside downtown. There are plenty of spots in the Ann Arbor area, like the office park that Masco moved into.