MEDC announces $3M loan to help finance 618 South Main apartment project in downtown Ann Arbor
A seven-story apartment project in downtown Ann Arbor has received a $3 million boost from the Michigan Economic Development Corp.
The MEDC announced Michigan Strategic Fund approval of loans for a handful of projects across the state, including new apartments slated for development at 618 South Main in Ann Arbor.
Ryan J. Stanton | AnnArbor.com
"The finished project will include loft-style apartments, some studios and one- and two-bedroom units," the MEDC stated. "The project is expected to generate a total capital investment of $37 million and create six full-time jobs. The city of Ann Arbor Downtown Development Authority has offered financial support in the form of a $650,000 grant for certain infrastructure improvements."
Ann Arbor developer Dan Ketelaar received approval from the Ann Arbor City Council back in June for the project and said he plans to break ground by next spring. The Ann Arbor DDA is chipping in $650,000 to pay for streetscape improvements along South Main near the project.
The MEDC previously announced in September that the Washtenaw County Brownfield Redevelopment Authority will use Michigan Economic Growth Authority school and local tax captures valued at $2.9 million to redevelop the 618 South Main site in Ann Arbor.
Kathy Fagan, a spokeswoman for the MEDC, said the $2.9 million tax-increment financing assistance included in the brownfield plan is on top of the $3 million loan announced this week. Counting the DDA grant, the total incentives for the project now amount to more than $6.5 million.
According to an MEDC briefing memo on the tax capture, $2.2 million in school taxes resulting from the project will be captured and reinvested into the project, along with $679,793 in local taxes.
Those tax captures will be used to reimburse the developer for demolition work, lead and asbestos abatement, infrastructure improvements, site preparation and other costs.
The approved plans call for demolishing two existing structures to construct a seven-story residential building containing 70 studio apartments, 70 one-bedroom units, 42 two-bedroom units, and seven duplex units each containing one bedroom — for a total of 231 bedrooms.
Unlike most other apartments built in the downtown in recent years, Ketelaar assures his newest project won't be geared toward University of Michigan students.
"This is not a student project. This is designed specifically for young professionals," he said just before the City Council approved his project back in June.
The 618 South Main development is one of six projects the MEDC announced incentives for this week, including a $300,000 grant to Cataphora Inc., a data analytics software company based in Menlo Park, Calif., that is planning to expand its operations in Ann Arbor.
Cataphora, a company whose co-founders include two University of Michigan alumni, first established a small presence in Ann Arbor in 2011. In the next three years, the company is expected to invest about $200,000 in its Ann Arbor operation, including the creation of 30 new jobs.
According to the MEDC, the six projects being incentivized are expected to generate up to $138.8 million in investments and add 399 new jobs in Michigan.
"Today's wide range of projects all mean more jobs and greater economic opportunities for people across Michigan," MEDC President and CEO Michael Finney said in a statement. "These investments demonstrate a growing momentum of real opportunities here resulting from our improved and highly competitive business climate and our state's world-class workforce capabilities."