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Posted on Tue, Jul 9, 2013 : 5:57 a.m.

Developer seeking tax credits for 80-unit affordable housing project in Ann Arbor

By Ryan J. Stanton

Burton_Commons_2011_a.jpg

A building elevation drawing for Burton Commons as presented in 2011.

J Bradley Moore & Associates

A previously approved affordable housing development near Packard Road and US-23 in southeast Ann Arbor is showing signs of life again.

Burton Commons — a five-building, 80-unit apartment complex planned for 2805 Burton Road — appeared on the Ann Arbor City Council's agenda last week.

The council approved changes to the payment-in-lieu-of-taxes — or PILOT — plan for the project to increase affordability for lower-income tenants.

The developer now plans to apply for low-income housing tax credits from the Michigan State Housing Development Authority in August.

Stephen_Kunselman_031813_RJS_001.jpg

City Council Member Stephen Kunselman, D-3rd Ward, said he's not necessarily excited about the project, nor is he necessarily opposed to it. "There's a lot of ambivalence with that project because it's been out there for so long," he said.

Ryan J. Stanton | AnnArbor.com

The PILOT provides an exemption from all property taxes for the term of the MSHDA agreement — not to exceed 50 years. That's subject to approval of the state tax credits.

Under the original PILOT approved by the city in July 2008, all of the units were to be occupied by households at 50 percent of the area median income or less — with 20 units set-aside as permanent supportive housing in partnership with Michigan Ability Partners and POWER.

According to the new plan, no longer will any of the units be set aside for supportive housing services, which typically include case management, job training, and drug and alcohol treatment.

The project is now expected to serve a mix of tenants ranging from extremely low-income (30 percent of AMI) to low-income (60 percent of AMI), said Brett Lenart, the county's housing and community infrastructure manager.

Lenart said the PILOT will not take effect until the financing is secured, the buildings are constructed and the units are occupied by qualified renters.

The owner continues to be the Ann Arbor Limited Dividend Housing Association Limited Partnership, but the development partner of MHT Housing — a Michigan-based nonprofit — has been replaced by Highridge Costa Housing Partners, according to a memo from Lenart.

Affiliates of Highridge Costa are the general and limited partners of the Ann Arbor Limited Dividend Housing Association Limited Partnership.

The California-based company has developed or invested in 275 affordable rental properties comprising approximately 27,000 affordable housing units, Lenart said.

Tom Erickson, senior vice president of Highridge Costa, said the development team really hasn't changed at all. It's just that instead of MHT Housing submitting the application for tax credits to the state, Highridge Costa will be doing it now — but with MHT still involved.

"They're going to be the general partner, and we're going to be the limited partner going forward. They submitted the application last time, and we'll be submitting it this time," Erickson said.

"We're the land owner and we never really stepped out of the development role," he added. "We've always either been the sole developer or we were a co-developer. They're the local nonprofit we're going to be using, but we've always been involved. We'll be the co-developer."

The development team was unsuccessful in securing funding for the project when it last applied in February 2012. It's a competitive process and other projects scored higher, Erickson said.

He said it's about a $15 to $16 million project and they're counting on $10 million or so in tax credits, plus a roughly $5 million loan from the U.S. Department of Housing and Urban Development.

The City Council approved the original site plan for Burton Commons in 2007. At the time, the plans included five three-story buildings with 120 units and 185 parking spaces.

Due to the nationwide housing financial crisis, city officials said, the developers never were able to secure the financing needed to build the apartment complex.

The developer received approval from the city in 2011 for revised plans that reduced the 120-unit project to five two-story buildings with 80 units and 145 parking spaces.

Erickson said the one thing that is not changing is the unit mix, which is 40 two-bedroom units and 40 three-bedroom units. He said they'll cater to a range of income levels.

  • 10 percent will be at 30 percent of AMI
  • 20 percent will be at 40 percent of AMI
  • 40 percent will be at 50 percent of AMI
  • 30 percent will be at 60 percent of AMI

The site plan for Burton Commons received a two-year extension from the city in 2011, and that expires on Dec. 28, said Wendy Rampson, the city's planning manager. She said the developer will have to pull building permits before then or seek another extension to the site plan.

The city doesn't have a limit on the number of times a site plan can be extended. But each time that happens, it's reviewed by city staff for compliance with current city codes.

City Council Member Stephen Kunselman, D-3rd Ward, said he's not necessarily excited about the project, nor is he necessarily opposed to it.

"There's a lot of ambivalence with that project because it's been out there for so long," he said. "I think it's something that the neighbors have had some issues with on the connections on Eli Street, but I think it is what it is and we'll kind of have to keep tabs on it."

Kunselman said it's for the private market to determine if there's a need for more affordable housing in southeast Ann Arbor.

"Obviously they haven't been able to come up with funding," he said. "If all of a sudden there's funding now, what's ironic is they're tapping into the same sort of funds that the Ann Arbor Housing Commission is hoping to tap into, so there's a lot of competition when it comes to that."

He added, "The question I asked originally was — what is the vacancy rate in apartment buildings out that way, and how can you afford another apartment building when there's high vacancy rates?"

Erickson said market studies indicate there's a need and he's confident they'll fill the units quickly at the rents they'll be charging and the income levels they're targeting.

"We're just hoping to get a winning application in so we can get this project going," he said. "We have a great team and I think it's going to be a great project."

Project architect Brad Moore of J Bradley Moore & Associates agreed.

Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's email newsletters.

Comments

leaguebus

Wed, Jul 10, 2013 : 2:57 a.m.

Household Size 1 2 3 4 5 6 Median Income $61,200 $70,000 $78,700 $87,400 $94,400 $101,400 Low (80%/74%) $45,500 $52,000 $58,500 $65,000 $70,200 $75,400 Very Low (60%) $36,720 $42,000 $47,220 $52,440 $56,640 $60,800 Very low (50%) $30,600 $35,000 $39,350 $43,700 $47,200 $50,700 Extremely low (30%) $18,350 $21,000 $23,600 $26,200 $28,300 $30,400

whale11

Tue, Jul 9, 2013 : 10:03 p.m.

What are AMI (area median income) figures? That would help understand what the rentals will be.

Westfringe

Tue, Jul 9, 2013 : 5:02 p.m.

There is plenty of affordable housing in Ypsi very near to where this would be built. We don't need more affordable housing in SE MI.

Basic Bob

Wed, Jul 10, 2013 : 4:13 a.m.

It's actually closer to Burns Park than Ypsi.

annarboral

Tue, Jul 9, 2013 : 2:23 p.m.

Why would you add 80 units and collect no property taxes? The city will have to provide police & fire services. The AAPS will have to provide schools for the children. I'm sure there are many more costs that I'm not thinking of right now. So this is situation where the taxpayer will be paying for someone elses housing, just like we are paying for someone elses usage of buses. An honest news article would include all the costs the taxpayer will be obliged to pay.

nickcarraweigh

Tue, Jul 9, 2013 : 1:40 p.m.

At least this will give authorities a place to start looking for poor people, providing easy, round-the-clock observation of them until the city's hired consultants agree on their final disposition.

PhillyCheeseSteak

Tue, Jul 9, 2013 : 1:33 p.m.

Looking at a map of Ann Arbor, Burton and Eli roads appear to run between Packard and Washtenaw, and actually seems to be slightly nearer to Washtenaw than Packard.

Elijah Shalis

Tue, Jul 9, 2013 : 12:39 p.m.

So the article fails to mention what the projected monthly rental rates would be.

racerx

Wed, Jul 10, 2013 : 1:52 a.m.

Thank you Elijah Shalis! Is that really that hard to include? 30% of AMI does nothing for me. Provide a solid number like $500/mo., something! Besides, who really knows what Ann Arbor's "area median income" is?

gladys

Tue, Jul 9, 2013 : 12:29 p.m.

Could you please provide a map with the exact location of this proposed housing?

JBK

Tue, Jul 9, 2013 : 11:57 a.m.

Location, location, location...... All I can say is thank GOD, this is going up near the A2 / Ypsi border. This project will fit right in with the surrounding area. A couple months back, there was 'speculation', that the Briarwood Mall area was a target for this nonsense, and that a multi-story parking deck would be put in so that some affordable housing coiuld be built. Lets all hope that has been put to rest!:)

timjbd

Fri, Jul 12, 2013 : 2:47 a.m.

Westfringe, Do you think those people do not have access to Briarwood now? Most of my drug dealing, thug buddies have cars.

Basic Bob

Wed, Jul 10, 2013 : 4:06 a.m.

There is no border between Ann Arbor and Ypsilanti. There are two townships. As far as fitting in, it looks just like Ann Arbor. You can't blame Ypsi for their mess.

Westfringe

Tue, Jul 9, 2013 : 5:04 p.m.

I'm pretty sure he's more concerned with the influx of thugs and drug-dealers that this would bring to Briarwood timjbd.

Tano

Tue, Jul 9, 2013 : 1:44 p.m.

@JBK Affordable housing for poor people is "nonsense"?

timjbd

Tue, Jul 9, 2013 : 1:33 p.m.

You don't want apartment blocks to detract from the natural beauty of Briarwood?

missmisery

Tue, Jul 9, 2013 : 11:19 a.m.

I'm glad to hear there will be 3 bedroom units. It's difficult to find 3 bedroom apartments that are somewhat affordable for low-income families in this area.

Dog Guy

Tue, Jul 9, 2013 : 10:50 a.m.

If none of the units is reserved for the drug-connected, how will this project attract "young professionals" to Michigan?

racerx

Wed, Jul 10, 2013 : 1:56 a.m.

Yeah right. Just like 810/510? Packard St. A rental house near UM's campus where LAWNET busted the occupants who were selling drugs out of the house. The house only became a problem when word got out that the resident, a drug dealer, was being invited to several campus parties and selling his product to upper middle class UM students. Nope. AAPD didn't bust the place, it took LAWNET. Though some in the community knew this was occurring for quite sometime. Point being, it only became a problem when UM students began buying from the guy. Yup the "drug-connected" attracting "young professionals" who were already here...in Michigan.

Hmm

Tue, Jul 9, 2013 : 12:37 p.m.

Good one dog guy, I laughed at your joke. Bunch of uptights on A2.com. What a surprise!