Ann Arbor DDA officials want proceeds from sale of city properties to go toward affordable housing

DDA Chairwoman Leah Gunn has an idea she's planning to bring forward in the form of a resolution next week: Send the net proceeds directly to the city's housing trust fund.

"I think it is a very good idea because it will help to provide not only affordable housing but supportive services, which we desperately need," she said. "My feeling about this is that this would re-energize the housing trust fund and it wouldn't cost anybody anything."

Gunn said she's planning to have a resolution on the DDA's agenda when it meets next Wednesday at noon. The resolution would encourage the Ann Arbor City Council to support the idea. Gunn said she's hoping for a resolution to go before council for consideration on Sept. 17.

At the request of the City Council, the DDA is leading a planning process for the future redevelopment of five city-owned sites downtown:

1. The Library Lot atop the new underground parking garage off Fifth Avenue;
2. The old Y Lot where the YMCA and 100 affordable housing units once stood at the corner of Fifth and William;
3. The ground floor of the Fourth and William parking garage;
4. The Palio Lot at the corner of Main and William;
5. The Kline Lot at Ashley and William.

Because William Street is the link between the five properties, the project is known as the Connecting William Street initiative.

As part of the planning process, the DDA has been inviting groups of downtown residents, employees and business owners to share their thoughts on the future of the five properties. The next meeting takes place from noon to 1:30 p.m. Sept. 10 at the downtown library.

DDA board member Bob Guenzel, chairman of the Washtenaw Housing Alliance board, said he's been in talks with City Council Member Sandi Smith, who also serves on the DDA, about the possibility of using the property sale proceeds to re-energize the city's housing trust fund.

"She's still fleshing out the specifics," Guenzel said. "But the idea is that we had 100 (affordable housing) units downtown, they've disappeared and there is a very strong advocacy for housing, especially for those individuals who are most at need."

Guenzel said the five lots need to be developed, but considering their location in the center of downtown, adding new affordable housing units there might not be the best idea.

"We'd be further ahead looking near downtown, looking at the existing structures even of the Housing Commission," he said. "But to do that you need some revenue — not only for bricks and mortar, but maybe ultimately for supportive housing.

Gunn agreed.

"One of the problems with building affordable housing in the downtown is that this is the most expensive land in the city," she said.

The city owns 360 affordable housing units at 18 sites overseen by the Housing Commission. City officials said earlier this year the Housing Commission is now operating in the black after staff cutbacks, but the units it oversees are suffering continued deterioration due to a lack of money, with an estimated $14.5 million-plus in deferred capital needs.

The city purchased the old YMCA building at Fifth and William in 2003 in hopes of ensuring the housing units inside would be preserved after the YMCA moved into its new facility on Washington. Had the city not purchased the building, city officials feared the YMCA could have sold it to someone else and the city would have permanently lost 100 units of affordable housing.

But the city found the building had been poorly maintained — the boiler was deteriorating and eventually died, the plumbing was poor, and the building lacked proper accessibility for the disabled.

Because of the deteriorating conditions, the city paid to relocate remaining tenants to other housing units in 2008 and then tore down the building.

The original goal was to sell the property to a developer who would demolish the building, but that deal fell apart in 2007. The developer sued the city in federal court but lost.

The site has remained a surface parking lot ever since.

Guenzel said the prospect of transferring sale proceeds to the housing trust fund presents a real opportunity to add new affordable housing units in the city.

"I just think it's a tremendous opportunity for this community and I think City Council shares that value about housing," he said.