Village Green gets new price for city land to build apartments in downtown Ann Arbor

Crawford said the city expects the sale of the land will happen in either late August or early September with construction starting thereafter. According to a project timeline from last fall, the city had been expecting the sale to happen by June 1.

The mixed-use project includes apartments and a multi-story public parking structure to be owned by the city of Ann Arbor.

The city had long intended to sell the property at First and Washington to Village Green for $3.3 million, and its budgeted $3 million of that toward the police-courts building addition to city hall.

After Monday's vote, that price is now $3.2 million. The reason for the change has to do with flooding issues that are being addressed through revisions to the foundation design, specifically how it will handle the below-ground water table.

"Since this project is in the Allen's Creek area the water table and flooding issues are of great importance to the city and the developer," reads a memo prepared by Mary Fales, senior assistant city attorney, and Crawford.

"The city, working with the DDA, desired a 'bathtub' design for areas where the water table could rise to meet the deck's foundation," it says. "This design in essence prevents water from entering the structure and is similar to how the DDA designed the Fifth Avenue structure."

Fales and Crawford said it's in the city's best interest to avoid the risk of on-going pumping by extending the "bathtub" design to encompass the entire foundation. The added cost of the design change is estimated to be about $250,000.

Since a portion of the foundation would have required the "bathtub" anyway, city staff recommended the City Council agree to contribute $100,000 toward the design change. The developer would be required to fund the remaining $150,000.

Village Green has plans for an 11-story (8 above grade) project called Ann Arbor City Apartments that includes a 244-space parking garage in addition to 156 apartments. The Downtown Development Authority will manage the public parking that is being built as part of the project.

Council Member Stephen Kunselman, D-3rd Ward, questioned why the city was taking a $100,000 hit for the design change when he thought the DDA should absorb the cost. But most council members agreed it was a fair deal since it's the city's asset.

The city entered into an option-to-purchase agreement with Village Green in February 2007 and it was last amended in August 2010 to extend the term of the option to June 1, 2011. The city administrator later exercised authority to extend the timeline to Aug. 30, 2011.