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Posted on Thu, Sep 24, 2009 : 6:02 a.m.

Threat of lawsuit lingers with Ann Arbor officials unsure of City Place developer's next steps

By Ryan J. Stanton

In the aftermath of one of the more unusual decisions in Ann Arbor City Council history, city officials are left wondering what's on the mind of City Place developer Alex de Parry.

Will he actually try to construct the apartment complex nobody in city hall wants developed? Will he file a lawsuit against the city over delays with the project and the recent moratorium on development around his property? Will he try to pull demolition permits to tear down seven century-old houses that stand in his way?

"I don't understand what the developer is doing," said Mayor John Hieftje. "This is about as convoluted and complicated a development issue as I've seen. I think it's going to go down as one of those things people will be talking about years from now and say, 'Hey, do you remember that time we had that proposal? That was something.' It's been kind of a saga."

For fear of triggering a lawsuit against the city, the City Council voted 11-0 on Monday in favor of a by-right site plan for City Place, a project city officials have opposed for more than a year. Officials don't believe the plans to raze seven homes and construct apartments are good for the Germantown neighborhood nor do they think the plans are compatible with the city's Central Area Plan.

But they agreed the site plan meets all the requirements of the city's zoning ordinances and therefore required approval from the City Council.

The by-right site plan - different from a planned unit development proposal for City Place that includes a more attractive streetscape - is little more than two apartment buildings separated by a surface parking lot. The plan would allow Fifth Avenue Limited Partnership to build two three-story buildings with 24 units, 144 bedrooms, and 36 surface parking spaces on 1.23 acres at 407-437 S. Fifth Ave.


The by-right site plan for City Place. Drawing courtesy of developer.


The seven houses that face demolition. Ryan J. Stanton |

City officials say a six-month moratorium on development - which they plan to extend for six more months in February - will hold up the project until next September when an ad-hoc committee will report back to City Council on the historic significance of the Germantown neighborhood. Several city officials, including Hieftje, already are convinced the district is worth granting historic district status, which likely would keep any current version of City Place from being developed.

Asked on Wednesday whether he has any intent of pushing forward with development of the by-right site plan or suing the city, de Parry declined to comment, saying those are legal issues that he'll leave up to his attorney. De Parry acknowledged he is modifying a PUD for City Place based on recent neighborhood input and is awaiting revised color renderings from his architect.

"We are doing revisions to both the massing and the look of the streetscape PUD that address comments that were made at our neighborhood meeting in August and suggestions we have received from interested citizens," de Parry said, adding that he welcomes continued discussions with the community once those are done.


A previously submitted PUD plan for City Place. Drawing courtesy of the developer.

Before the developer brought back the by-right site plan, city officials and de Parry were under an agreement that a revised PUD would be crafted and would come back to the City Council in January. City officials are convinced that de Parry - who they believe has no intention of building the by-right project - is merely posturing.

They think the developer plans to use the by-right site plan as leverage to say, "Hey, I could build this, so why don't you let me build one of my PUDs." But de Parry's tactics this week haven't left him in good standing with the City Council.

"He threatened us. He dared us to deny the matter of right project," said Council Member Sabra Briere, D-1st Ward. "And he told us that if we did, he'd sue us. It's an amazingly antagonistic position to take."

The threat of a lawsuit became apparent in the days leading up to the City Council's Aug. 6 vote to enact a moratorium. Lawrence R. Ternan, an attorney representing Fifth Avenue Limited Partnership, wrote to city officials on July 30 that the developer "vigorously" objected to the moratorium and believed it contradicted the agreement reached July 20 to have the developer work out a revised PUD.

"It is difficult to conclude that this moratorium has any other goal except preventing the redevelopment of the City Place site, and it could be construed as an attempt to stop the City Place project without having to formally deny a site plan or PUD," Ternan wrote.

The attorney's letter concluded that the moratorium represented an unlawful taking of de Parry's development rights and rights to due process.

"We think we've acted in a proper way, in a legal way, and in good faith throughout," Hieftje said, commenting this week on the risk of a lawsuit. "The historic district, that's all in statute and I think it's very difficult to challenge."

If the Germantown neighborhood officially becomes a historic district, de Parry would have to take his development before the city's Historic District Commission, which could reject his apartment complex on historic grounds alone.

Ellen Thackery, a field representative for the Michigan Historic Preservation Network, said her organization has closely followed the issues surrounding City Place and feels the Germantown neighborhood is worth preserving. She believes the city acted within the scope of its powers by implementing a moratorium and historic study.

The Germantown Neighborhood Association, a coalition of nearby property owners, continues to strongly oppose the current plans for City Place but says it would support a project that respectfully restored the seven houses on Fifth Avenue and added some units in a way that was in keeping with federal guidelines for historic rehabilitations.

Briere said she's looking on the positive side and considering City Place a learning experience and an opportunity to reexamine the safeguards intended to protect Ann Arbor's near downtown neighborhoods.

"Because this has been such an unpleasant experience, we've been given the gift of experience, one that we wouldn't have thought as a council," she said. "It's forced us to look at our complacency, our belief that things were more or less going to continue the way they were, the belief that our Central Area Plan protected us, that the good will of developers protected us. All of that has proven to be wrong, and so that means that we should rethink how we do things and we have a moment to do that."

Ryan Stanton covers government for Reach him at or 734-623-2529.



Tue, Sep 29, 2009 : 8:22 a.m.

To Larry W. The properties are on South Fifth AVENUE, not Fifth Street. The article did state Fifth Avenue. They are between E. William and Packard (to the north of E. Jefferson), on the east side of the street.


Fri, Sep 25, 2009 : 8:17 p.m.

Hi Ryan, Terrific solid reporting there and I appreciate the information. Could someone explain what a PUD is? And what is a "by-right" plan and why does it matter? Oh and while I'm at it, it'd be helpful if you put a cross street so we could get a better sense of the location. Sure the pictures of the houses are terrific, but just saying "Fifth Street" isn't very helpful. Thanks.


Fri, Sep 25, 2009 : 1:55 p.m.

The problem with using the HDC to obstruct development projects is the burdensome tenants of PA 169 that are placed on a historic district property owner. You no longer are a homeowner but a steward of the exterior of your entire property. I believe a certain legal preservationist admitted recently on the phone that the homeowners had to be sacrificed in order to stop the developers. The fact is that 90% of Ann Arbor Contributing Historic Properties are only historic because they are part of a streetscape neighborhood. This means that unless someone famous lived there (mayors are the lowest qualifying civic entity), something famous happened there or the home is architecturally significant (one of a kind or very few) otherwise in Ann Arbor our historical significance is limited to being part of a pre-depression developments that create the ambiance for example of the Old West Side. Therefore the construct of PA 169 and its lack of nuance, is grossly overreaching in its control of such contributing properties. The city could solve 90% of its problems if it actually did clarify the planning, zoning and historical aspects of development and these were codified into a city database with the nifty new software they bought to provide all three departments data on one screen. For any given property in a historic district the building department could do 90% of the HDC staff work. Every property in a historic district should have a historical disclosure document that eliminates the guesswork, hassle and finagling that exists in the current environment. I believe that the historic study committee would have been justified based on the merits of the Beakes house alone but when the city rejected a historical study committee proposal in December 08 it seems transparent that the second study was created by Carsten and supported by council to obstruct the developer at the expense of residences who have no idea what they are getting into. Its time for real HDC reform and education, in a recent conversation with the mayor he was unable to inform me of who in the city was in charge of the HDC staff; Jill Thacher and Brenda Aquaviva I was asking because the night before I was escorted out of the HDC meeting by the A2 police I was speaking during the public comment section of all three applicants from the Old West Side and its lack of an intensive study and if they had the right to judge any property in the OWS until the study was done. I am pursuing legal action, because it is clear that the Mayor, City Council and the entire HDC staff and commissioners were comfortable with removing a citizen from a public hearing without warning or cause because what I was saying was true there is no intensive level study for the OWS. No apology. Why should we create more historic districts in A2 when the current historic districts may not even be valid? Furthermore if the commission fails to have full attendance over 50% of the time and 99% of all of Jill Thachers recommendations are approved by the commission then why bother with voting The Historic District Coordinator is the Judge the Jury and the executioner. Now if they could their job like post the last six months of meeting minutes or the annual report for 2008 we might actually be able to quantify what they do. Oh I forgot they are to good to be questioned and actually have no oversight at all. City Council and the Mayors office need a primer on Historic preservation, their ignorance is costing us dearly.

Monica Milla

Thu, Sep 24, 2009 : 4:11 p.m.

At times like this, i sure miss the ann arbor is overrated blog!

David Cahill

Thu, Sep 24, 2009 : 12:24 p.m.

Sorry, slyde, but you are wrong on the law. Of course I could be wrong - once I thought I made a mistake and I hadn't. 8-) If you are aware of any court decisions that support your view, it would be nice if you shared them with us.


Thu, Sep 24, 2009 : 10 a.m.

A2Conservative: "... let U of M steal your taxable land...". The City of Ann Arbor likely owns the most land in the City of Ann Arbor. They have removed the most land from the tax base.


Thu, Sep 24, 2009 : 9:56 a.m.

Mr. Cahill, while you are correct they can legally do a historic district, if it is done to specifically block this one development that it is considered an undue burden and regulatory taking. It would most certainly subject the city to a hefty lawsuit and they would likely lose badly.I'm also a big confused by the A2Conservative conservative, you are advocating for a government takeover of a private developer. What happened to the free hand of the market? oh well... I find it comical that the "elite" Ann Arborites all in a tizzy...for shame, it makes for a great laugh.


Thu, Sep 24, 2009 : 9:40 a.m.

Everyone talks about AA as this beautiful town with old time atmosphere. Well, after living here for a while I have seen that charm disappear. Make way for the high rises, tear down the neighborhoods, kick out the small shops for chain fast food, let U of M steal your taxable land, etc. You can keep this over rated place! If you want this to be another Sterling Heights, I'm out of here. I do not pay ridiculous taxes to live in just another city. If the builders want to tear the whole place down and rape the charm, throw the white flag and give it to the money grabbers. They have already ruined the housing market, let them ruin the cities too!


Thu, Sep 24, 2009 : 9:25 a.m.

Please stop the hyperbole. "hulking 40-plus foot high superstructure" is a ridiculous statement.

David Cahill

Thu, Sep 24, 2009 : 9:18 a.m.

The enactment of an emergency moratorium to prevent the destruction of historic houses while a study committee ponders the creation of a historic district is perfectly legal, both under the state law governing historic districts and under Ann Arbor's parallel historic district ordinance. Many historic districts (including our Old West Side Historic District) because of threats from developers.


Thu, Sep 24, 2009 : 8:58 a.m.

beuwolf: "The creation of historic districts is legal.". Absolutely. However, it appears that this historic district is being studied/created solely to block development. This is illegal.. You may disagree. If so, please consider and explain this nuance: In 12/08 Council rejected a resolution to establish an Historic District Study Committee for Germantown. However, in 8/09, City Council established said Study Committee, and placed moratorium on demolition for a two-block area, including the proposed site of City Place. The latter resolution appears to be a weak political block, designed to appease distraught neighbors.. In 8/09, Council first discussed a City-wide R4C development moratorium. Council wisely voted it down, citing likely litigation from many owners and developers, and subsequent indefensibility by the City in court. Multiple plaintiffs equals class action?. The City chose the next best tactic. Create a legal hindrance for one specific, irritating developer, testing his litigation fortitude. All of the bantering by the City is merely political posturing designed to demoralize and defeat a single developer. This has the side benefit of temporarily appeasing the neighbors, whose true interests have been left unprotected by the current zoning language.


Thu, Sep 24, 2009 : 8:26 a.m.

The city of Ann Arbor has a long standing reputation of being a nightmare to attempt development or improvement. Unless you are willing to be shaken down for "donations" to the councils pet projects, play their game of politics, and give in to their fanciful "requests" you can forget it. It would be nice to see someone have the resolution to stand up to them in a court of law and teach them a lesson. A2grateful said it all, don't like the property owners choice? Buy the property yourself!


Thu, Sep 24, 2009 : 8:10 a.m.

A2Grateful: The city is in the process of re-examining R4C zoning. If a historic district is created, the developer can do his development provided it complies with the Interior Department regulations for historic preservation. The creation of historic districts is legal. The developer did not work well enough with the neighbors to strike a compromise. He insisted on a hulking 40-plus foot high superstructure in order to cram in another floor. He did not plan to preserve the old houses-what he was actually proposing was sawing off the front and sides of the existing houses and pasting them onto the exterior of new construction. The rendering provided by the developer's architect is quite deceiving. The only saving grace of the rendering is the hot Camaro.


Thu, Sep 24, 2009 : 8 a.m.

You hit the nail on the head. Craft good zoning and then stick to it. I don't want these buildings torn down either but the process has to work for both the developer and the public. Otherwise you get projects like this.


Thu, Sep 24, 2009 : 7:45 a.m.

Mayor John Hieftje: "This is about as convoluted and complicated a development issue as I've seen.". The City has thrown every possible development roadblock that they can imagine for City Place.. The developer has presented numerous site plans, all of which were defeated, except for the most dense.. The City's R4C zoning ordinance defined the project. The developer merely complied with the law.. Don't like the law? Change it.. Don't like the property owner's choice of use? Buy the property and do what you want, in accordance with the zoning law.. Don't like convoluted and complicated a development issues? Elect representatives that know how to craft good zoning, and then have expertise to facilitate it.. Current Planning Commission, Mayor, and City Council obviously have no clue. Convoluted and complicated development issues occur when all developers are held hostage by arbitrary, whimsical, and fantasy-based "rules for development." These include bribes disguised as park donations, affordable housing donations, storm sewer disconnects from unrelated properties... the list goes on and on.. Expect City Place projects in R4C districts. The City actually wants them. If it did not, why has the language not been changed?