$1M state grant will fund demolition of blighted Georgetown Mall property in Ann Arbor

Past development efforts have been hindered by contamination of soils under the building with perchlorethylene, a chemical used by a dry cleaning business that once operated in the mall.

DEQ officials said the contamination appears to be contained and has not impacted neighboring residents.

The state's grant will be administered by the Washtenaw County Brownfield Redevelopment Authority. It will pay for removal of contaminated soils and demolition of the existing buildings.

"We are thrilled to see this project move forward, and to partner with the MDEQ to facilitate site cleanup with this grant," County Administrator Verna McDaniel said in a statement.

The new development project is the result of meetings with residents, city and county officials and market studies conducted by the developer, Packard Square LLC.

The Ann Arbor City Council voted unanimously in May 2011 to approve a site plan for Packard Square, a $48.2 million redevelopment of the blighted Georgetown Mall property.

A county official said the developer is taking all the risk with the cleanup. The city and county will not have to front any funds, and therefore will not lose anything if the project isn't financed.

Bloomfield Hills-based developer Craig Schubiner of Harbor Georgetown LLC plans to construct a four-story, mixed-use building containing 230 apartment units and 23,790 square feet of retail space. It's expected to include a 144-space parking garage underneath the apartment building, as well as 310 surface parking spaces.

Schubiner said last year he hoped to break ground on the project in August 2011 and have it completed by the end of 2012 or early 2013.

Amenities for the residential component include indoor recreational facilities and an outdoor pool and courtyard.

The development is designed to be pedestrian friendly, and will provide for a new bus stop, secure bicycle parking, and a pocket park with native plant species. Onsite stormwater management will include underground detention and natural filtration.

The completed residential and commercial spaces will encourage recycling and include energy efficient appliances and fixtures.

The redevelopment project now has approval from the Washtenaw County Brownfield Redevelopment Authority, the city of Ann Arbor, the Michigan Economic Development Corporation, and the DEQ for state and local tax-increment financing for infrastructure, site preparation and other environmental activities.

The MEDC approved about $2 million of tax capture, and the DEQ approved about $1.2 million in eligible environmental activities.

According to a DEQ news release, the project, now estimated at "more than $46 million," will provide construction jobs as well as 45 permanent jobs associated with the retail portion.

The completed project will add an estimated $500,000 annually in tax revenue to the community, according to the news release.

Nathan Voght, an economic development specialist with the Washtenaw County Office of Community and Economic Development, provided an update on the Packard Square project and DEQ grant in an April 24 email to city and county officials.

He said a meeting with the developer and DEQ a few weeks back had resulted in the DEQ offering to award the grant to the county, with the condition that the developer show project financing within 120 days of grant award. The concern on the part of the DEQ, Voght said, was giving the grant to a project that doesn’t occur.

Voght said the county was ready to issue a request for proposals for an environmental consultant to assist the county with the grant administration.

Any funds the county expends in grant administration on an environmental consultant during the 120 days between the time the grant is awarded and the developer demonstrates or doesn't demonstrate project financing, the DEQ has committed to reimbursing.

"Therefore, the county is not risking any funds if the developer does not finance the project," Voght said in the email. "In addition, any cleanup work conducted by the county will be paid for by the developer and then get reimbursed by the grant."

Once the work actually begins, demolition and remediation should not take more than 60 days, according to a construction schedule cited by Voght.