updated: Georgetown Mall demolition on hold as state gives 30-day extension for $1M grant

"I can’t tell you how frustrating this is," Council Member Margie Teall, D-4th Ward, wrote in response to the administrator's email, calling the situation "very disappointing."

Bloomfield Hills-based developer Craig Schubiner of Harbor Georgetown LLC told AnnArbor.com via email Thursday night that city and county officials have it wrong, though.

He said he has lined up the necessary financing for Packard Square and is moving toward closing. He said he's working toward having a contract signed with the demolition contractor as early as next week.

"Our goal is to have demo and cleanup start in the next couple weeks as soon as the contractor is selected, contracts are signed and permits are obtained," he said. "We have removed transformers and shut off utilities in anticipation of obtaining demolition permits immediately."

Washtenaw County is the lead local government on the project and the Michigan Department of Environmental Quality is responsible for the disbursement of demolition funds.

The DEQ in May announced a $1 million brownfield grant to help redevelop the 6.7-acre site on Packard Street. Vacant since 2009, the former mall property has three dilapidated buildings and has been a concern to neighbors due to vandalism and vagrants.

The state grant is being administered by the Washtenaw County Brownfield Redevelopment Authority and will pay for removal of contaminated soils and demolition of the existing buildings.

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 mall property.

Schubiner wants to construct a four-story, mixed-use building containing 230 apartment units and 23,790 square feet of retail space.

The project also is expected to include a 144-space parking garage under 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.

Schubiner now has requested a 30-day extension of the deadline to demonstrate project financing to the DEQ, which was a condition of the grant. The DEQ approved the extension to Oct.18.

"We don't know what position he's in because the (demonstration of financing) has not come through," said Nathan Voght, an economic development specialist for the county.

Schubiner said he's in a good position.

"We believe that we have satisfied the financing contingency in the grant and we are working with the DEQ in an effort to remove that contingency immediately," he said.

Because of the extension, Powers said, site demolition and environmental cleanup activities will not occur before Nov. 1 and might be delayed even further.

Schubiner maintains that's untrue.

He also said construction drawings should be complete by next week and building permits will be applied for shortly thereafter.

Civil engineering drawings for a new offsite sanitary line of 1,000 feet that runs offsite and will benefit the city also are complete now and permits will be applied for as early as next week, he said.

"The project is going out for final bids next week," he said. "There is significant retailer interest in the site and retail pre-leasing is moving forward nicely."

The county released a request for proposals for the demolition and hazardous soil remediation in July in hopes of moving forward as quickly as possible.

The county received five bids by the Aug. 17 deadline. County officials expected contractor selection would take about a week, and then another couple weeks to sign a contract, with work beginning as quickly as possible after that. But that didn't happen as planned.

Although the county asked for pricing to recycle or re-use the large quantities of brick from the buildings, Powers said, the bidders declined to provide pricing. He said all bidders have been asked to provide pricing by Sept. 24 to ensure the brick is not landfilled.

Teall said she wonders if there's any way the city can help by asking home-building agencies like Habitat for Humanity to haul the bricks away for their own use.

At least one of the low bids, not accounting for the pending brick pricing, has placed a condition that all private financing be in place prior to proceeding with any contracts with the county.

Powers said the county is assuming the contractor ultimately awarded the work will require financing to be in place, and the grant to be fully released prior to contract signing.

Asked if there's any way the demolition and cleanup can go forward if Schubiner can't demonstrate financing for Packard Square, Voght said county officials are working on that.

"What we're trying to do right now is get to the point where we can award the contract to the low bidder and the plan is to work with the developer and that contractor to sign a contract and move forward," he said. "One of the contingencies will be the payment on that contract, because until the financing of the project is demonstrated, the county will not front any of those monies."

He said he knows Schubiner is working diligently to secure the financing, and the county is hoping he'll have it in place by the Oct. 18 deadline.

Voght said "it would be a big disappointment" if the community loses out on the $1 million grant to clean up one of the biggest eyesores in Ann Arbor.

"This grant could really help kickstart this site and help clean it up," he said. "This is the hardest part of these sorts of projects — the environmental costs and the demolition."

Voght said the county definitely is not going to front any money for the demolition or cleanup because it doesn't want to be in a position of risking public funds on a private project.

Residents say demolition can't happen soon enough.

"I drive by the former Georgetown Mall several times every day, and it's quite depressing," said Kathy Richards, who lives nearby on Stone School Road. "I'm sure this whole neighborhood will be happy when this blight is finally removed."