Ann Arbor Student Housing – 2018 Update

Around this time last year, I wrote a post entitled “The Truth about Student Housing in Ann Arbor” that was something of a response to all the comments I was hearing about the new developments cropping up around town. I work in the student housing industry to a certain degree so had first hand market research at my fingertips and was able to share some cold hard facts on the subject.

Hub Ann Arbor

Hub Ann Arbor brought 310 beds to Huron St in August, 2018.

The down and dirty was that student housing development had not remotely kept up with demand as enrollment growth and decades of limited (essentially zero) additions to the student housing market had created significant pent up demand even aside from any population gains in the student body.

Occupancy was over 99%, the highest of any of the 50+ university markets we have polled over the years with rents continuing to grow.

However, 2018 brought the most significant additions to the private student housing scene in the university’s history, 1,247 beds in three new complexes opened in August. Thus, time for an update on the scene.

Michigan_ResearchReport_2019

Despite a huge addition on the supply side, occupancy stayed an extremely healthy 98.32%. Overall rents were up 4.64% from a year ago but that is skewed by such a large swath of new, higher priced housing. Apples-to-apples rental rates of existing buildings increased a more modest 1.81% buoyed by huge increases in Studio and 1 Bedroom units, 12.52% and 10.50%, respectively. Most of the new developments have been focused on larger unit types as they are seen as more profitable (4+ bedrooms, only 1 kitchen) which has put serious pressure on the relatively few studio and one bedroom residences.

The three newest properties, Hub Ann Arbor, The Yard, and Six11, opened at 98.40%, 100%, and 96.00%, respectively.

Anecdotally, I did see more advertised specials and discounts, particularly for Six11, so it is possible that effective rents did not increase as much as asking rents.  However, smart money would bet that any minor hiccups experienced in lease up this year will be smoothed over next year when only the 253-bed Vic Village North will open (replacing Ulrich’s).

Enrollment continued to grow, up 1.55% this year to 46,716, so demand shows no signs of slowing. What may be interesting to see is the effect of the university’s efforts to improve socioeconomic diversity on the private housing market.  Notably the Go Blue Guarantee which officers free tuition to families with incomes under $65,000 and significant support to families earning under $180,000.  Obviously lower income students will be less likely to bite off on the premium rent levels being charged at newer developments.

Thus, another year, another very healthy lease up in the student housing market in Ann Arbor.  As I have noted before, it’s hard to even imagine a scenario where these buildings were not built.  By necessity there would be nearly 4,000 students living elsewhere around town, moving further out into the neighborhoods or commuting in from the edges of town.

 

The Y Lot – Rock, I Presume? Hard Place, I Presume?

The controversial downtown real estate topic du jour is currently what to do with the so-called “Y Lot”, the vacant former YMCA parcel on William Street adjacent to Blake Transit Center. The situation has been covered ad nauseam by Ryan Stanton at the Ann Arbor News and there’s come great historical context available at the old Chronicle website. I’ll try to sum up where we’re at as succinctly as possible.

20161031_130525

The Y Lot, approximately 0.8 acres on William between Fourth & Fifth.

They city bought the Y Lot back in 2003, tore down the old YMCA after it moved to Washington Street, and then very nearly pulled off a sale that would have created a new development with apartments and potentially a hotel on the upper floors with retail and a transit center on the ground floor. That deal fell apart in 2007 resulting in a lawsuit the city eventually won, the new Blake Transit Center was rebuilt mid-block, and the lot was again put up for sale in 2013. The city sold the site to Dennis Dahlmann for $5.25 million in 2014 with an agreement that stipulated a mixed-use development with a series of restrictions be built within four years. If no such project was built (as has been the case) the city had the right to buy the property back for $4.2 million.  That right kicked in on April 2nd, 2018 so the city council now must decide whether or not to negotiate with Dahlmann or exercise that right.

fcea2fba343cae89

Development proposed by Dahlmann/The Habit Co. in 2016 for the site.

So what should the city do?

First off, what’s the lot worth? I don’t think there’s any question it’s worth more than $4.2 million. There’s a couple of different appraisals out there, the one hired by Dahlmann says $6.1 million is most likely, the one hired by the city quotes values from $7.7 million to $12.5 million depending on the size of building that can be built. I pulled my own data (Google Sheet) to show pretty clearly that redevelopment properties with D1 zoning have been typically going for $275-$300 per square foot. Without restrictions, the site could easily be worth $9.5 million to $10.5 million.

At first glance, it’s a no brainer for the city to buy it back, decide what they would like to see and sell it to a developer for a significant profit. Dahlmann signed an agreement, didn’t hold up his end of the deal – as many it seems, expected – and now has to face the consequences. Unfortunately it’s not that simple. Dahlmann has sued the city, citing a bad agreement and the city not holding up their side of the deal, notably as it relates to an underground connection to the Library Lane garage that doesn’t actually exist. He’s offered $1.5 million to settle that lawsuit, remove all restrictions and own the land free and clear.

There are a few reasons the city may want to consider a deal with Dahlmann.  These are big time “ifs” but I’ll lay it out there. I believe the city is in a good position to win a legal battle with Dahlmann but there’s almost no question they have a little exposure, the agreement was somewhat ambiguous and this could get dragged out for years. The other “if” is does Dahlmann actually intend to build this project if a deal is made? I’m told he cares about this community and his legacy and he has the wherewithal to pull it off, his track record thus far says otherwise. The final question is whether or not that $1.5 million offer has room. Let’s be conservative and say the lot is worth $8 million without restrictions, there’s a case to be made that a settlement figure here should be $3 million or more.

Here’s why I think the city should at least consider a deal. Even if the property is worth $9 million or more, we’re at the long end of the investment cycle here, there’s a chance that value comes down in the next couple of years. It’s likely that the litigation will tie up the site for at least a couple of years so you’re in an uncertain position in say, 2020 or 2021. Furthermore, if Dahlmann will really build the project, you could be looking at $1 million plus in tax revenue coming in by 2021. The alternative is another project that’s likely 2-3 years behind. The profit the city is counting on can be made up in just a couple years if the development happens. Lastly, and this is not a knock on our administration, it’s more just the way government works, but the city is terrible at selling and/or developing real estate.  Cases in point, the Library Lot and this very site which is some 15 years into a rocky unproductive process.

So, if council believes Dahlmann will build the project, feels there may be some legal exposure if they don’t negotiate, and can deliver a better settlement number while keeping some restrictions in place (let’s say an affordable component and a 3-4 year timeline), it might be time to make a deal.

If they have no confidence in Dahlmann, feel good about their legal position, and cannot do better than $1.5 million, it’s time to buy it back. With good leadership and a settlement of the lawsuit, the city can make money for other services and potentially deliver a worthy project for downtown.

Lastly, it’s important to note that Mayor Taylor and council member Ackermann came out with a new affordable housing vision for the Y Lot over the weekend. It’s a commendable plan and I’ve long said that one of the only ways to really put a dent in the affordable housing commitment is to use public land with an affordable developer partner, but I fear this particular site is too messy to bring this into the fray in the 11th hour. It also completely changes the economics of the deal as discussed above. I might recommend they consider applying this exact same strategy to another city parcel, the Kline Lot for example, which is less entangled?

There is a special city council meeting to decide the fate of the Y Lot this evening, April 23rd. I think there is a case to be made for either side and I urge all our council members to carefully weigh all options.

Unbuilt Ann Arbor – Top Ten Unrealized Downtown Projects

Over the years a number of projects have been proposed downtown that, for one reason or another, never came to fruition.  The clear lens of hindsight shows us that ultimately some of these projects were probably doomed from the start and the city is probably better off without them.  Some might have been wonderful additions to the built environment.  In most cases we’ll never know.  Below is my top 10 list of unbuilt projects in downtown Ann Arbor.

Honorable Mentions

Thompson Terrace

Thomson Terrace

Proposed back in 2008 by local owner Bruce Thompson, this development was to be a re-purposing of the existing structure, formerly home to an A&P.  Described as a mixed-use “Italian village”, it looks more like a suburban strip center.  The site was eventually demolished and is now home to the Foundry Lofts.

Ann Arbor Bank Tower

Back in 1969, Ann Arbor Bank proposed building an 8-story office building at 109-113 South Main. Just after Tower Plaza turned the tide of high rise development in Ann Arbor, the building did not comply with new restrictions on height and setbacks. Given the character of Main Street and the quality of 1960’s buildings, this is probably not one to cry over.

Leaning Tower of Pizza

640px-tom_monaghans_leaning_tower_of_pizza

Nowhere near downtown but no list of unbuilt projects in Ann Arbor would be complete without mention of Tom Monaghan’s crazy plan for a 30-story slanting tower up on the northeast side by Domino’s Farms. The building was to be loosely based on a Frank Lloyd Wright project called the Golden Beacon that was conceived in 1956 but never built. The whole thing is wild but the only thing that ever came out it is a 50-foot scale model out at the site.

#10 Glen Ann Place

Glen Ann Place

This 9-story mixed-use project was proposed back in 2005 by Joseph Freed & Associates at the corner of Glen and Ann. Like so many projects, its prospects were killed off by The Great Recession. A fairly decent if uninspiring development, it may have found its way higher up the list but it has since been supplanted by the upcoming The Glen project on the same site.

#9 The Moravian

The Moravian

On the borders of what one might call downtown, this residential project was once planned for the corner of Madison and 4th.  This 5-story, 63-unit project with underground parking seems almost ho-hum now but in 2009, it brought out a veritable NIMBY uprising.

#8 Near North

Near North

Back in 2010, a partnership between Avalon Housing and Three Oaks Group received approval for Near North, a 39-unit affordable housing project on North Main Street. Ultimately, Avalon determined that the project was no longer feasible and the site plan lapsed. The site is now planned for market rate townhouses.

#7 The Gallery

The Gallery

The Gallery (which confusingly shares its name with another recently approved condo project at Ashley and Jefferson) was a $67 million, 11 story condo building once approved for the former St. Nicholas Greek Orthodox Church on Main Street.  It seems the project was unable to secure financing and new townhouse condominiums were built there in 2013.

#6 Seasons

The Seasons

This one goes back to the 1980’s, I had never heard of it but it was mentioned in a Facebook post in the Ann Arbor Townies Only! group. Back in 1988, local developer Herbert Schneider proposed building a 14-story office and condominium building at 410-424 South Main. Details are a little hard to come by from the pre-internet era, but I a couple of historic homes were moved all the way down to Huron Parkway to make way for the project. Apparently they got as far as digging the hole for the foundations before the project fell apart and they used dirt from the further excavation of the Michigan Stadium field to fill the hole. It is now the site of the Ashley Mews development and DTE building.

#5 Metro 202

Metro 202

Two different projects were proposed for the former car dealership lot at Division and Washington, a nine-story apartment project by locally based McKinley, immediately followed by a 120-room hotel concept by Chicago-based First Hospitality. Either would have been an improvement over the current surface parking lot.

#4 Ashley Promenade

Ashley Promenade

This project for the so-called Kline Lot in downtown Arbor might have topped this list if not for the scant details available. Proposed back in 2010 by developer Ron Jana for the city lot at Ashley and William, the building would have housed a hotel, conference center, workforce housing, and retail across 525,000 square feet. There would be underground parking and the project was to be a public-private partnership. I’m not sure this one ever got off the drawing board but I personally would love to see it revisited.

#3 Library Lot Hotel & Conference Center

valiant-thumb-537x334-17291

Probably the most high profile project in recent years (and the subject of a new and controversial building) is the Library Lot Hotel & Conference Center as proposed by Valiant Partners back in 2011.  A wild modernist design to be sure, it would have provided an impressive conference center option downtown but ultimately the city was to be a financial partner and that proved untenable.

#2 Tierra on Ashley

Tierra on Ashley.jpg

Not as big as the other projects at the top of this list, Tierra on Ashley was just bold and unique and was intended to replace a long vacant service station. Proposed by local engineering and consulting firm PMA Consultants, the building would have had two stories of retail, two floors of offices for PMA, and condos above. Environmentally friendly and bravely modern, Tierra could have been an exciting addition to the west side of downtown.

#1 William Street Station

William Street Station

Of all the unbuilt projects on this list, William Street Station is the one that stings the most. Perhaps because the site is still languishing as a vacant lot. Perhaps because the AAATA ended up rebuilding the Blake Transit Center next door in a severely limiting mid-block sliver of land. Perhaps just because it was such a cool project. A true mix of uses, the twin towers managed to fit in 100 units of affordable housing, 219 hotel rooms and conference space, 55,000 square feet of office, and a new transit center on the ground floor. Huge and perhaps overly ambitious but hey, it was the mid-2000’s, anything was possible. When the economy turned developer HDC asked the city for more time to put the project together and was rejected. Ultimately, I’m not sure they would have ever gotten it off the ground but now we’ll never know.

 

I’m sure there are other projects that have come and gone, some no more than a glint in the eye of some ambitious aspiring developer, others going so far as earth moved and foundations laid. If anyone has a story about something from way back in the archives, please share in the comments.

Comparing Population, Apartment Rent & Supply Growth Across the Midwest

A lot has been made of high rental rates here in Ann Arbor, I even undertook a review of the state of the student housing rental market just last month (spoiler alert: the rent, occupancy and rate growth is bananas). However, this issue is not unique to our town, rents are skyrocketing virtually everywhere. Being the data junkie that I am (and having access to this sort of data at my day job), I wanted to take a look at how the Ann Arbor MSA stacks up to other markets in terms of rental rates and growth. I pulled information on 65 different Midwest markets and for good measure, I also looked at population growth, unemployment rates and inventory changes from 2012 to 2017. I last took a statistics class my sophomore year of high school so I’m certainly missing some significant conclusions but I’ll offer up a few observations that stand out to me.

As it relates to Ann Arbor specifically, our community posted the sixth highest rental rate at an average of $909 per unit, Chicago is first at $1,046. A2 is tied for the third lowest vacancy rate at just 3% trailing Appleton, WI and Jackson, MI(!). The five year rent growth of 20.13% is fourth, firmly planted in with the bigger metros of Kansas City, Columbus, Grand Rapids, Chicago and Minneapolis. This seems to be driven in part by a supply side gain of just 2.82%, only two other markets with any type of population growth, Kalamazoo and Elkhart, added less. For those that think Ann Arbor is going through a revolutionary development boom, we’re actually doing less than most of our neighbors.

oakcliff-photo-1

Oakcliff Apartments, 217 units added to the supply side in Ann Arbor in 2015.

In general, college towns are growing, factory towns are not. No shock there. Of the top 10 growth metros, 8 have a major university. The areas bleeding population include Flint and Saginaw here in Michigan, Youngstown, OH and Rockford, IL.

The Great Plains are the place to be. Markets in Iowa, Minnesota and Nebraska seem to be fairing extremely well. Strong population growth, extremely low unemployment and impressive rent growth.

Supply side growth, or lack thereof, is an obvious major factor in rent growth. Certain markets with no new inventory like Elkhart, Jackson or Muskegon actually saw strong rent growth despite lack of population growth and lagging employment. There is a somewhat strong correlation (see Dr. Elzinga, paid a little attention in stats) between supply growth and rent growth although not between supply growth per capita and rent growth. I suspect that a sizable percentage of rent growth is inorganic in that it’s coming from high new construction rents rather than rising existing rents. Certainly rents are going up in existing buildings as well but markets with a lot of new construction skew the numbers upward.

All in all some thought provoking data. Interested to hear other’s conclusions.

 

Note: All rent, inventory and occupancy data sourced from CoStar Group.

New Mixed-Use Project Proposed Near Michigan Stadium

Just before Thanksgiving, plans were submitted to the city requesting a rezoning of a full city block at the northwest corner of Hoover & Greene in the shadow of Michigan Stadium for a 170-unit mixed-use development.

151 E. Hoover Development

Proposed by Southfield-based REDICO and designed by Myefski Architects (known for the proposed Library Lot development and the under construction Hub project on Huron), this development is slated to include 170 units with 180 total bedrooms, predominantly studio and one bedroom apartments. The building will have a corner pocket park and 3,350 square feet of retail, a nice bonus in this neighborhood, essentially replacing the small commercial building there now. Parking will be provided in a two story garage below the building and includes more than one space per unit, even more than one space per bedroom given the small floorplans. It’s more parking than is needed by zoning and probably more than is even needed by market demand so the MLive commenters that come out of the woodwork to beat the parking dead horse will have to stick to articles about the Lowertown development.

The block is home to predominantly rental homes and is presently zoned half C2B and half R4C. REDICO is petitioning the city to rezone the entire block bound by Hoover, Greene, Davis and Brown to C2B to accommodate the proposed project. This seems like a great in-fill site with a unit mix that can cater to a mix of students, graduate students and young professionals.  Plus a little neighborhood retail! We’ve noted recently on this blog about the ridiculously high occupancy and rents of properties near campus, studios are now renting for north of $1,400 and have gone up nearly 12% in just the last 2 years.  Hopefully this one sails through the process, seems like an excellent redevelopment project and the need is obviously there.

1140 Broadway Lowertown Development: Time to Push

This week city council will take a vote on re-zoning for the controversial 1140 Broadway development in Ann Arbor’s Lowertown neighborhood. From an urbanist perspective, there’s a lot to like about this proposal. The redevelopment of a blighted vacant lot, environmental cleanup, significant future tax revenue and strong density in an in-fill location near downtown and along a transit corridor. That said, the zoning change is somewhat questionable, the height and density is pushing the site to capacity, the architecture certainly isn’t groundbreaking, and the mix of uses is not as beneficial to the community as it could be. Because the project requires a generous re-zoning, this is a time where Ann Arbor needs to push back and absolutely demand we get the best project we can.

1140 Broadway

Rendering of the 1140 Broadway Lowertown Proposal

The Lowertown site has been one of the most visible parcels of vacant land in the city for over a decade now. Once home to Kroger and an adjoining retail center, the buildings were torn down in the mid-2000’s for an ambitious mixed-use project dubbed Broadway Village. This $171 million development included 152,689 square feet of office space, 138,275 square feet of retail, and 185 apartments. Planned by East Lansing-based Strathmore Development Co. with support from the State of Michigan, it never truly broke ground, killed off by the Great Recession.

o

Rendering of the defunct Broadway Village proposal.

The 6.4 acre site at Broadway and Maiden Lane has sat fallow ever since, blighted and polluted. Fast forward to 2017 when Morningside Equities Group, led locally by Ann Arbor resident Ron Mucha, put forward a $146 million proposal to build 549 apartments, 71 condominiums, 4,635 square feet of retail and 573 parking spaces. The package includes $10.2 million in brownfield reimbursements from the city for environmental clean up and other “community benefit” improvements. The whole thing hinges on a re-zoning from the Planned Unit Development (“PUD”) zoning put in place in 2003 to C1A/R (Campus Residential). The spirit of that zoning is really intended for sites adjacent to central campus and is pretty generous in the heights and density it allows. The argument can be made that the Broadway site is next to the university’s Kellogg Eye Center and Wall Street campus (basically the Eye Center and a boatload of parking) but it’s dubious. As such, the city is in a position to make a few more demands than they would if the development was “by right”, designed to conform with existing zoning.

As I think about this project and how it might be improved, I keep returning to a somewhat similar development currently under construction in Detroit. City Modern is being built by Dan Gilbert’s Bedrock Detroit, LLC on 8.4 acres of land in Brush Park, just north of Downtown Detroit. The transformative development will add 410 total units, 303 apartments for rent (including 54 affordable senior units) and 107 for-sale condos along with 22,000 square feet of retail. There is a wide range of housing options includes flats, carriage houses and townhouses, all with striking modern architecture. This is true mixed-use, fitting into a historic neighborhood with a unique and thoughtful design. In contrast 1140 Broadway looks monolithic, fairly generic in its architecture, with one dominant housing type and a pittance of retail space in the third phase.

bp04

Rendering of City Modern development currently under construction in Brush Park in Detroit.

The community benefits of the Lowertown project are the 4,635 square feet of retail, environmental remediation, a commitment to 30 units of workforce housing and some greenway elements on the north end of the site along Traver Creek. Given that this is arguably the largest private residential development in the city’s history (Glencoe Hills is the largest apartment community in town, 574 units built in the 1970’s, Tower Plaza downtown would be a $149 million project in today’s dollars), it’s simply not enough. Developers don’t want to build retail right now, the future of the whole brick and mortar retail industry is in question, but there’s no reason this project can’t have more flexible commercial space, perhaps a mix of retail and office. This site deserves true mixed-use, not incredibly dense residential with a sidecar retail building that’s years away. The environmental cleanup is a positive but that’s somewhat of a given for any new development, funded by Brownfield Tax Credits. The 30 units of workforce is fine but I think 10% of units set aside for a mix of lower to median incomes should be a goal here, perhaps a senior element. The green space and path on the north of the site is a concession to the neighborhood but it’s just a trail from Broadway to a parking lot.

b1-entry_fotosketcher

I don’t want this developer to walk away. They have a good track record in the city (Liberty Lofts most notably) with local ties. This site is in dire need of redevelopment and environmental remediation. But with re-zoning leverage, this site plan can be improved with further push-back from planning and council. A few places to start would be more true mixed-use with a greater balance of commercial space and residential, a better commitment to affordable and senior housing, and improved urban design with green space. Addressing these items would go a long way to making this project more exciting and deserving of this location.

The Truth about Student Housing in Ann Arbor

When residents and visitors comment on the changing face of Ann Arbor they’re most commonly referring to the proliferation of high-rise student housing projects that have popped up along South University, Huron and Washington over the past decade or so. Too often these projects are misunderstood. In addition to my running commentary on the development of these buildings here in Ann Arbor, I work in the student housing business on a day-to-day basis (brokerage across the country) so I wanted to shed a little light on how they work, the supply-demand dynamic at the University of Michigan, and why they’re a necessary evil here in town.

20160513_092611

Zaragon Place, with 248 beds, was one of the first high-rise student projects in recent years, opening in the fall of 2010.

First, it’s important to note these are private housing projects, built by developers and marketed towards upperclassmen students. The university maintains its own housing system, the bulk of which is meant for first year students, and it has also built new housing in recent years including North Quad and the Munger Graduate Residences. The private off campus buildings lease by-the-bedroom typically with parentally guaranteed annual leases and often in larger 4, 5 and even 6 bedroom configurations. The developers have been almost exclusively out-of-town companies and thus far all but Zaragon have sold their projects soon after completion. The characterization of these developers as being profit-motivated and not long-term stakeholders in our community is unfortunately largely accurate.

Second, love it or hate it, these buildings are filling a huge housing need. The first vertical student housing development in recent times was Corner House at State and Washington, which opened in 2003 with just 154 beds. Since that time the university has grown by 8,135 students. Between the university residence halls (1,080 beds) and all of the private development (3,730 beds), there has been approximately 4,810 beds added to the current stock in that time. Not even close to keeping pace. The flurry of new development looks to add an additional 1,241 beds in 2018 and a total of 2,384 over the next 4 years, still not keeping up with anticipated demand. We could argue all day about whether the university needs to or should grow but it has. If there are not new buildings to house students on or off campus, it presents an entirely different set of problems.

Lastly, if it’s clear that the students have to live somewhere, they can live near campus in mid to high rises, we can re-zone some areas a little further from campus for mid-rise development, or they can live way further out and commute in from garden style apartment complexes. To date, the vast majority of new projects have been vertical in D1 zoning areas within a couple blocks of campus. The exceptions would be The Courtyards on North Campus and the new project on Main Street, The Yard. A new development, The Cottages at Barton Green up on Pontiac Trail, would be the first commuter style complex in Ann Arbor although most universities have a plethora of this type of housing. I am generally opposed to this type of student project here in Ann Arbor, it encourages car ownership and places a concentration of students in residential neighborhood. However, it would provide additional much-needed new construction housing at a more affordable price point than downtown.

1462393722611-e-university-avenue

Six11 will bring 343 beds to East University in the fall of 2018.

For those that question the need and demand for housing, feel free to peruse my company’s research report on the market:

UofM_ResearchReport_2017

The quick stats: university enrollment is 46,002, a new record, and the freshmen class of 6,847 is the largest in school history. Average occupancy across the market is north of 99%, the highest rate we have ever surveyed at a university. Rents increased over 3.5% year over year although demand for 4 bedroom unit types seems to be waning. All those new buildings?  They’re all full. The worst occupancy was 96%. It’s pretty evident that the student housing market at the University of Michigan is extremely healthy.

What does that mean for the future? The university is likely to pump the brakes on growth in coming years, they’re essentially at capacity to house incoming students on campus. There seems to be a good chance that the university will explore building a new residence hall in coming years, the rumor is a larger replacement for aging Mary Markley Hall. Private development is likely to continue as well, mostly in the South University corridor but I’m hearing whispers of a new project on Washington as well. Students have to live somewhere, I believe the focus should continue to be on a dense projects near campus that dissuade car ownership with a renewed emphasis on quality building materials and design, and attractive, pedestrian-oriented ground floor retail and streetscaping.

 

Is Dockless Bikeshare the Future of ArborBike?

I was recently in South Bend for a Notre Dame football game and noted the stunning number of visitors getting around on identical lime green bikes. Students were riding them, drunk tailgaters were hopping from spot to spot and leaving them anywhere they liked, I probably saw close to 100 bikes over a couple hour span.  Perhaps unsurprisingly, this is one of the new dockless bike sharing systems in action, LimeBike. I’ve written on Ann Arbor’s bikeshare system, ArborBike, in the past, but as I looked upon more LimeBike riders in a two hour period than I see ArborBikers in an average summer month in Ann Arbor, I couldn’t help but wonder if this was the future for our town.

limebike-031517-lt

ArborBike is a bike sharing system relying on stations, in this case 13 of them across the greater downtown area. It’s theoretically a great idea and has worked extremely well in larger cities like New York, London and Chicago. The issues here in Ann Arbor are the relatively short travel distances, lack of quality bike infrastructure, and limited number of stations and bikes as a result of high upfront costs.

A dockless system solves virtually all of those problems. It works just like it sounds, bikes are picked up and left virtually anywhere, preferred locations are sidewalks and other reasonable places, there are fines for leaving a bike in the street or other dangerous spot. There’s usually a set reasonable radius as well, nice work biking to Milan but you probably couldn’t leave the bike there. Users locate bikes with an app on their phone and rides typically cost $1 for 30 minutes or an hour with longer term plans available as well. There are a litany of new startups in the space, the aforementioned LimeBike is one, others include MoBike, Spin, Ofo and JUMP. As opposed to heavily subsidized public systems, these are for-profit enterprises eagerly deploying in cities, think Uber or Lyft but for bikes.

There are 125 bikes in the ArborBike system three years in, there are already 500 LimeBikes in the South Bend system after just a few months. While ridership data is not currently available, I can say unequivocally, it’s exponentially higher. By foregoing stations and using cheaper, lighter bikes, the system can be implemented and expanded rapidly and cost effectively. LimeBike is a good example as they seem to be somewhat focused on college campuses and towns. In addition to South Bend/Notre Dame, they’re in Greensboro, NC at UNC-Greensboro, Raleigh, NC at North Carolina State University and the University of Washington in Seattle. Dockless bikeshare is already huge in China and is entering the United States in a big way, there are four competing systems operating in Washington, DC alone right now.

1ocrqhs7k14rjvnhsf_waia

With uncertain funding and the future of ArborBike in doubt, it’s time for Ann Arbor officials and the Clean Energy Coalition (operators of ArborBike) to open a dialog with one or more of these companies. I suspect this is already happening as Sean Reed, Executive Director of the CEC, was familiar with the proliferation of dockless systems nearly a year ago. The service can come quickly and I think most would agree that getting more residents and visitors on clean, healthy bikes is a positive thing. Here’s hoping we see an expansive fleet of shareable bikes on the streets of Ann Arbor in the near future.

 

A New Ann Arbor Train Station: Time to Weigh In

Recently the prospect of a new train station in Ann Arbor has supplanted the library lot has the most talked about and controversial local civic issue. With public comments on the Environmental Assessment Report due today, November 2nd, it’s time to weigh in.

20160427_065750

The report mentioned above was released by the city and Federal Railroad Administration back in in September stating the preffered alternative is to build a new train station and adjacent parking deck on a parking lot in Fuller Park. The history of a new station in Ann Arbor is exhaustive and has been covered impeccably by Ryan Stanton of the Ann Arbor News as well as by fellow blogger Vivienne Armentrout at Local in Ann Arbor (who may be the most informed person in town on this issue).  There’s also a great take by Doug Kelbaugh, Dean Emeritus at the Taubman College of Architecture & Urban Planning over at All Aboard on Depot Street.

Given the depth of information available on the subject, I will attempt to just briefly summarize the situation to date.  The vision for expanded rail and a new station in Ann Arbor goes back a long way, notably to John Hieftje’s Mayor’s Model for Mobility in 2006 that was partly the basis for the City of Ann Arbor’s Transportation Plan, adopted in 2009. This laid out a plan for a new intermodal station on Fuller Road to serve Amtrak and commuter rail to Detroit with a link to a seperate proposed light rail route, what later became the Ann Arbor Connector. The University is obviously a major stakeholder and it was suggested that the project be combined with additional parking for UM, predominantly health system students and staff. In the interest of brevity (highly recommend Vivienne’s article linked above for the full tale), the plan fell through, the university built a new parking deck on Wall Street, commuter rail as part of the RTA Master Plan failed at the ballot box in 2016 and the Connector is in limbo due to the enormous cost. So here we are trying to decide what to do with a decrepit existing Amtrak station with more questions than answers. On to my take.

I have something of a unique viewpoint on the train station in that I take Amtrak all the time. Like all the time. I took the train from Ann Arbor nearly 50 times in 2016, I’m taking it today. I even started a spreadsheet this year keeping track of my trips and times so that I had good anecdotal data for posts like this (average delay of 15:37 in 2017 thus far). It’s an imperative link for my job and provides connectivity and productivity that cannot be replicated with other forms of transit at this time.

That said, do we need a new station? Probably? The current one is small and seriously dated, not ADA compliant and the parking is a joke. There are plans to add service that should continue to increase ridership and Ann Arbor’s station is both the worst station on the line and the busiest. Should it be built in Fuller Park as a massive parking deck with sidecar station for a cost approaching $100 million?  Definitely not.

fe4d31c7ba490e42

Look hard, there’s a station there somewhere.

The only real positives of Fuller Park over another site is the proximity to the hospital and potential connectivity to the Connector. The argument has been made that the hospital location is important for commuter rail which I find dubious. The line may never happen (I’ve harped on the foolishness of a line that connects A2 to New Center) and let’s remember this line is geared towards Ann Arbor area residents traveling to Detroit, much less so the other way around (there may be 10,000+ employees at the health system, there’s 20+ times that in the greater downtown Detroit area).  A platform could be built on Fuller Park if needed in the future. The Connector, ahem, connection, would be great but the prospect of that project is dim given the astronomical cost. Betting on that line seeing the light of day is a low odds gamble.

a2_train_station_site

On the negative side, Fuller Park is, in fact, a park. While currently used for UM parking, it could and should be a public use riverfront park, not a massive parking structure. Also, while close to the hospital, it’s not close to anything else. There are no Transit Oriented Development opportunities, no neighborhoods nearby, no proximity to downtown.

The existing location on Depot Street has always been a train station, is near downtown and Lowertown, is on a major transit corridor via Broadway/Plymouth Road and offers some unique attributes with the DTE site next door. In short, if a new station should be built, it should go there.

The report gives a number of economic reasons for Fuller Park, a large one hinges on the expanding of the Broadway bridges (unnecessary in the short term) and the acquisition of DTE and Amtrak-owned land (estimated at $6.7M-$12M). How much should it cost to acquire Amtrak land for a new Amtrak station? I think a fair number is $0 but whatever it is, it’s low. What the report fails to take into account is that acquisition of environmentally contaminated land from DTE should also be cheap, in fact the opportunity to partner with DTE on the parking aspect of a future project on that land could very well be a net positive. While the new station needs more parking than it has now (often over capacity in my experience, the current lot is a muddy free for all), it does not need nearly 1,000 spaces unless a million transit positive things happen over the next 25 years. Parking in the short term could be tucked below Broadway and shared with a DTE project. Additionally, there are great opportunities for development and neighborhood connectivity with a transit hub. Fuller offers none of that.

We have a great opportunity here to build a new transit hub for Ann Arbor, a gateway to our town. Expanded train service with all new trains (currently on order) should result in increased ridership (side note: actual ridership projected to increase 19% this year from a construction addled 2016, up 45% over the past 20 years but just 0.5% over the past 10, true increases will require more scheduled runs, better service or higher gas prices). Building a massive parking deck in Fuller Park seems a move geared towards UM parking, takes over an existing park and offers no unique opportunities other than a link to a long shot Connector project.

Depot Street offers the chance to build in a historic location near downtown, create synergies on the DTE site and Lowertown and still connect to strong transit links via Broadway. Properly executed and phased, the project could start at less than half of current cost estimates and grow as needed with ridership and commuter rail links. Our transit future is uncertain with autonomous vehicles on the horizon so investments made now need to be incredibly prudent. Modest, phased construction at the current location is the best path forward.

 

 

 

Update on The Glen Project

The most common questions I get generally run along the lines of “What’s going on with that construction site or vacant lot or empty storefront or project I read about a while back?”.  The desolate swath of land on Glen between Catherine and Ann across from Angelo’s slated for a mixed-use project called The Glen certainly fits the bill.

The Glen 1

The Glen as rendered in May, 2017

First announced in mid-2015, I’m happy to report that The Glen is still moving forward, albeit glacially.  The site plan is in its 4th review with planning, engineering in its 6th review and the traffic impact study (which appears to be the particularly sticky wicket here) is sitting in an impressive 8th review.

To provide a little background, the site was once home to the Glen Ann Service Station, two older homes and a small commercial building that formerly housed Da Vinci’s Pizza. The buildings were demolished in stages through the mid to late 2000’s.  Although technically in the Old Fourth Ward Historic District, you might not know it other than glorious Angelo’s across the street and a couple of remaining single family homes.  The area is dominated by two large UM garages, a couple of 1960’s low to mid-rise apartment properties and several other large campus or medical buildings of varying age and quality.  Suffice to say, this weedy patch of dirt represents an opportunity for a breath of fresh air in this corridor.

Back in 2005, Chicago-based developer Joseph Freed & Associates received approval for a PUD to build a 9-story mixed-use building including ground floor retail, 1-2 floors of office and apartments above.  The state’s Historic Preservation Review Board actually rejected the proposal to demolish the historic homes still remaining on the site.  Freed filed suit and the final settlement allowed the development to move forward with some modifications in 2017.  Locals will know Freed as the group behind the fairly mediocre (although I think solid in concept) Ashley Terrace condominium project at Ashley and Huron and the redevelopment of Arborland Mall in the late 1990’s.  The Great Recession killed their plans on Glen (and caused a complete implosion of the company culminating in developer Larry Freed being found guilty of fraud and sentenced to 230 years in prison in 2016).  Ultimately the lots were sold to new owners for $2.5 million in 2014.

Glen Ann Place

Glen Ann Place as proposed in 2007 by the now defunct Joseph Freed & Associates

Fast forward to the present day and the current developers, a group led by Craig Singer and Fred Goldberg, are slogging through a plan to build a 9-story mixed-use building anchored by a 162-room boutique hotel.  The building will also feature 24 apartments on the top two floors, just over 5,000 square feet of retail on the ground floor and 252 underground parking spaces.  While around the same height, the project is 33% smaller than the old Freed project due to several setbacks which include 5 large outdoor terraces.

The Glen 2

The big question marks here appear to be vehicular access to the site and traffic concerns.  As the always well informed and level headed MLive commenters are all too happy to bring up, traffic tends to snarl on Glen at rush hour and a roundabout at Fuller and Maiden Lane has been in planning since 2011 to help alleviate some of those concerns.  If this project and the proposed development at 1140 Broadway (subject of a future post) were to move forward, it seems the construction of the roundabout would be a necessity.  Traffic is complex and tends to be overblown by us average citizens because it impacts us in an out-sized way depending on our particular schedule.  In reference to this project there is a 234-page traffic impact study prepared by one Tapan Datta of Wayne State University, a man with a Ph.D. in Civil Engineering with a focus on Transportation.  Between that and the now 8 reviews by our industrious planning staff, I feel confident they’ll get this right.  My two cents: make the developers for The Glen and 1140 Broadway chip in for the street improvements to smooth this out.

The Glen is really just the type of project we’re looking for in Ann Arbor.  Perhaps a few stories too tall for the old guard but really not out of line for the area and a welcome dense mix of uses including a new hotel option in the greater downtown area, neighborhood retail and a few apartment units.  Plus, lots of parking, but mostly underground!  I’ll be honest, I’ve never liked the architecture, kind of a Frankenstein trying to blend the historic elements of the Old Fourth Ward with the modern design of the Medical Campus and a lot of different uses to accommodate in one building.  Neumann Smith had a tall order to fill here and I think they’ve done their best but it’s unlikely to win a Pritzker.

The Glen 3

That said, architecture is highly subjective, the plan is strong, the location is ideal, the materials are of good quality and I see no reason this project shouldn’t move forward once all the boxes are checked with city staff.  Let’s get this in front of council so we can see some hammers swinging, I say best of luck, tired of looking at that overgrown dirt patch.