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Posted on Thu, Nov 29, 2012 : 1:12 p.m.

MEDC announces $3M loan to help finance 618 South Main apartment project in downtown Ann Arbor

By Ryan J. Stanton

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.


Project architect Mike Siegel, left, and developer Dan Ketelaar hold up the latest rendering of 618 South Main at an Ann Arbor City Council meeting back in June when the project was approved.

Ryan J. Stanton |

The $3 million Community Revitalization Program loan is being awarded to 618 South Main LLC to redevelop what the MEDC considers a contaminated brownfield site, transforming it into a new apartment complex that will cater to young professionals in downtown Ann Arbor.

"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." Ryan J. Stanton covers government and politics for Reach him at or 734-623-2529. You also can follow him on Twitter or subscribe to's email newsletters.


paper or plastic

Fri, Nov 30, 2012 : 11:57 a.m.

You whiners fail to understand that $37 M equates to about $18M in wages for numerous Michigan companies and $19M for material suppliers, not to mention that those workers on site may get something to eat at South Main Market or Washtenaw Dairy. Property taxes will add another $1M to the local economy each year. Seems to e that the $3M is a very wise investment, much better than the $500M that Obama invested in Solyndra.

Tom Whitaker

Fri, Nov 30, 2012 : 3:35 p.m.

One more thing...this building is forcing the relocation of three established businesses, and space for a fourth start-up is also being demolished. There is no space being provided in the new building for any businesses to return to this block--only a ground-floor parking structure. Hardly a business/job creation magnet. Again, if the local economy cannot justify this project, and finance its own merit, then it should not be built.

Tom Whitaker

Fri, Nov 30, 2012 : 3:25 p.m.

Ahhh. Thank you for mentioning Solyndra. The Republicans complained about that being a case of government picking winners and losers, which they were supposedly against, but clearly its simply a matter of WHO gets to do the picking and WHO they choose to prop up. My point is that government, dominated by whichever party, should not be collecting tax dollars and redistributing them to private businesses, unaccountable job creation programs that pay huge salaries to administrators, or speculative real estate development schemes. Spend the revenue instead on making the City safe, efficient, and attractive, and supporting high quality schools and universities. Businesses and real estate speculators will be begging to set up shop here. And this is not to mention the fact that Ann Arbor is seeing a huge explosion of apartment buildings going up, yet our government is going to hand millions off to a developer to build yet another one in an already saturated market. This is exactly the kind of bad choice that proves why government should stick to governing and leave private enterprise investments to private enterprise.


Fri, Nov 30, 2012 : 5:09 a.m.

Rick Stevens :: Haters Gonna Hate

Tom Whitaker

Fri, Nov 30, 2012 : 3:04 a.m.

Insanity. Absolute insanity. If the South Main project can't stand on its own proforma without multiple government handouts, then it shouldn't be built. Did no one in State or local government learn anything from the collapse of the real estate market in 2008? Brownfield assistance was intended to help clean up and redevelop old rust belt industrial sites and blighted and abandoned buildings in depressed cities, not improve the bottom line for developers putting up high-end apartments in affluent communities. Ann Arbor is an affluent community, but you wouldn't know it from the way our school budgets have been slashed, our police and fire departments are cut to the bone, and our roads are crumbling under our cars. Apparently its because our leaders keep giving away money to developers, spending it on enormous capital projects, and wasting it on planning for grand schemes that no one needs or wants. All in the name of a few jobs that never seem to materialize.


Fri, Nov 30, 2012 : 5 a.m.

Makes one wonder if the developers and project owners are the only ones benefiting directly or indirectly from the infusion of tax dollars as "incentives" or "reimbursements" for Brownfield remediation and site development. We know that the tax payer and organizations who receive less tax money because of the diversions are losers.

Rick Stevens

Fri, Nov 30, 2012 : 12:41 a.m.

Why is our tax money being used here? It's an apartment building! Not a new start up business. Apartment building developers go to banks. That's what banks offer loans for. If it's a bad risk they either charge a higher rate or don't loan the money. But MEDC is? Just as bad as SPARK. Crony capitalism in action. If were willing to look into this I suspect you'd find lots of old friends 'helping' other old friends.


Fri, Nov 30, 2012 : 4:55 a.m.

When tax dollars are returned to developers and property owners as "incentives" one can wonder who else may benefit directly or indirectly from such payments, knowing that the tax payer is actually a loser.

Kai Petainen

Thu, Nov 29, 2012 : 11:26 p.m.

The MEDC has very strong links to Ann Arbor. For example, SPARK. Question -- does this transaction have any conflict of interest? (after all, MEDC is supposed to be state wide and not just Ann Arbor, right?)


Thu, Nov 29, 2012 : 10:40 p.m.

We need a city income tax so all these folks that profit from our city and its property owners have some financial skin in the game of providing services and giving tax dollars away.


Fri, Nov 30, 2012 : 4:52 a.m.

I am sure that many commercial and residential property owners would receive exemptions from such taxation. As it is many developers have their TIF payments returned as reimbursement for Brownfield remediation and site development incentives.


Thu, Nov 29, 2012 : 8:58 p.m.

The problem is that costs of operating the city are not going down. If the city cannot increase tax revenue by increasing the number of tax payers in the ever shrinking city tax footprint (thanks U of M), then the remaining tax payers will see their taxes continue to increase beyond the already ridiculous rates. The city must grow upwards or everyone who is not a millionaire or section 8 will have to move out.


Fri, Nov 30, 2012 : 4:50 a.m.

Unfortunately, any tax advantage that Ann Arbor would realize after construction of 618 S. Main is being gifted back to the developer and owner. Furthermore, some of the tax money is being diverted by MEDC from schools to the private development. At one time not so long ago developers were entirely responsible for site development and even paid for upgrading utilities that would service their properties. Total incentives are listed as at least $6.5 million. The developer should receive at the most payment for itemized Brownfield remediation and blighted building removal. Street beautification in order to enhance the value of the development should not be allowed.


Thu, Nov 29, 2012 : 8:33 p.m.

That is sick. $6.5M in government assistance for corporate welfare - to build one unwanted brick block downtown.. And surprise, surprise, the DDA helped. Even New York City couln't support the density plan now materializing in Ann Arbor.. Food, water, energy, security, parking, transportation, communications and maybe even some questionable art. Name one anchor of income besides the UM that will keep people here once the sales smooze wears off - none.

Rick Stevens

Fri, Nov 30, 2012 : 12:42 a.m.

Google? The one that hasn't hired anywhere near the number of people they promised to and hold a bunch of free parking spots that we pay for?


Thu, Nov 29, 2012 : 11:22 p.m.

Google, Inc