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.

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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.

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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.

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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.

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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.

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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.

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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.

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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:

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

The Uncertain Future and Huge Potential of ArborBike

Like some 1,000 cities around the world large and small, Ann Arbor jumped into the bike sharing fray back in 2014 with the aptly named ArborBike program.  Now entering its fourth year in operation the initial funding is starting to wind down and the future of the service is uncertain.

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Three years in now, most have probably seen the bikes in motion but a quick refresh for the uninitiated: There are 13 stations around town housing 125 bikes, available for rent with a credit card to the general public by the day, the month or the year.  The system is owned and operated by the Clean Energy Coalition in partnership with the Ann Arbor Area Transportation Authority (“AAATA”), University of Michigan and City of Ann Arbor.  They have a website, pretty straightforward really.

The funding and future of the system however, is less straightforward.  The University provided the bulk of the funding for the first three years, committing $200K annually.  For 2017, they have reduced their commitment to $80K, dropping to $40K in 2018.  Other sources, primarily the Downtown Development Authority, City of Ann Arbor and the AAATA, have stepped up their support to fill in the gaps and ArborBike is operationally funded through the 2017 biking season.  Financing for 2018 and beyond is a big question mark but there are some (relatively) simple solutions in sight.

First, it’s important to understand that bike sharing is a form of transit.  Even in places like Chicago or London, most trips are not tourists poking around the sights, they’re residents getting from A to B (or maybe poking around the sites a bit themselves).  As a percentage, fare collection at ArborBike is already on par with other forms of mass transit and can improve with increased ridership.  Second, the system grew organically by 24.57% to 17,675 trips in 2016 according to Sean Reed, Executive Director of the Clean Energy Coalition and head of the service.  That’s with no change in service, bikes or stations.  It’s starting to take hold.  ArborBike needs the proper investment, marketing and partners to not only secure funding but absolutely thrive.  Here are three ways to get the system to take off in 2018.

University/AAATA Partnerships with Shared Passes

The fastest way to boost membership and revenue would be to include the service with the UM student MCard.  There are 44,718 students at the Ann Arbor campus, each is assessed a couple of small semester fees on top of tuition including $4.25 for Student Legal Services, $4.60 for Central Student Government and $32.50 for University Unions & Recreational Sports Improvements.  Adding a few dollars to that last fee and updating the technology so that the MCard could provide immediate access in an integrated system would result in explosive ridership growth and significant operational funding.  The same integration should be established with the AAATA, specifically with GoPass.  GoPass is the DDA sponsored program that offers heavily discounted unlimited use bus passes for employees working downtown, there were 611,353 rides in 2016.  That pass should include ArborBike, again with a unified card system if possible.

Expansion of the System

The system is growing but is limited with the current number and locations of stations.  I’ve covered this previously on the blog, the present stations are virtually all at final destinations.  They’re downtown, dotted around campus and at the hospital.  The problem is that many, I would argue most, people are traveling to those destinations from an area that does not have an ArborBike station.  Namely neighborhoods around town, heavily student areas to the south of campus but all over the core of our city.  Reed believes there is funding for additional infrastructure from the Congestion Mitigation and Air Quality Improvement Program (“CMAQ”) and other sources if operational financing can be secured.  There are also some new examples of stationless bike share that might be an option.  The bikes are equipped with locks and GPS technology that would allow them to be dropped off and picked up anywhere within a certain boundary.  While the bikes themselves are more expensive, it saves money on kiosks and provides for greater flexibility.

Corporate Sponsor/Partner

The final piece of the puzzle is identifying a potential corporate sponsor.  Most of the larger systems are underwritten by an enormous company, think Citi Bike in NYC, Santander Cycles in London (formerly Barclays Cycle) or Biketown in Portland (Nike).  It’s possible that someone local could step in (Bank of Ann ArborBike anyone? they do love to help), the branding and advertising would be excellent but it’s a probably a pretty big check to write.  I think the obvious choice here is the closest Fortune 100 company to Ann Arbor, Ford Motor Company.  If that sounds crazy, you might be surprised to know that Ford is looking far beyond automobiles, embracing new technologies and all forms of mobility in a changing world.  They’re already sponsoring San Francisco’s program, bought crowd-sourced shuttle service Chariot and are opening an office in downtown Ann Arbor.  Seems like a perfect fit.

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2017 will be a pivotal year for ArborBike, will the growth continue, will funding be secured, will it survive?  The suggestions above are easily attainable but it will take a number of organizations working together to achieve them.  Sean Reed says the five year goal is 100,000 bike trips and I believe that is absolutely within reach with the right expansion and partnerships.

 

 

Coming Soon: New Openings Planned Downtown

Downtown Ann Arbor is constantly in a state of flux, businesses opening and closing, rents going up, owners retiring, young entrepreneurs trying to break in.  It’s sad to see old standbys close but also exciting to see new concepts try to make a go of it.  I’m always curious as to what’s going on when I see a storefront papered over, contractors laboring mysteriously behind the scenes, hopefully bringing something exciting to the block.  As a (very lax and part time) blogger of the haps downtown I try to ask around and dig through city documents to see what’s going on.  I thought I would share a few upcoming openings, some more exciting than others.

“Bar Star” – 220 S Main St

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The former home of Elmo’s T-Shirt Shop (now operating just down the street on Liberty) will be converted into a high end cocktail bar with the working title of Bar Star per construction documents.  This swanky spot comes from the owners of Melange and is being designed by local shop Synecdoche Design.  The interior appears to have a very modern theme with an open concept and chef’s table.  Critics may label as it as just another emblem of gentrification but it’s a substantial investment in the space and I look forward to checking it out.

 “TBD Sports Bar” – 309 S Main St

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This one I’ve been waiting on expectantly for some time, The Melting Pot closed here in November of 2015 and I hoped for a fairly quick turnaround as the space is relatively turnkey for a restaurant/bar.  After a misfire or two (I heard the owner of Tavern & Tap in Lansing had the space under contract at one point) there’s now a yet unnamed sports bar in the works.  I don’t have a whole lot to go on here, mostly looking at a building permit, but it appears that the proprietor is the owner of Shalimar next door.  The space will be opened up a bit, occupy all floors of the building and feature a rear patio on the second floor, much like Jolly Pumpkin next door.

Kosmo – 308 S Ashley St

The second outpost of local Korean spot Kosmo will open in the former Lucky Monkey Tattoo parlor.  Personally thrilled for this as it’s about 100 feet from my office, look forward to exceptional bibimbap.  This one was already covered by the Ann Arbor News here.

Fred’s – 403 E Washington St

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Another one recently covered by the News but the old Babo location at the corner of Washington and Division is being re-positioned as Fred’s.  This comes from Fred Lelcaj, brother of Babo owner Sava Lelcaj who recently ran a much smaller version of Fred’s on South U.  I never got to try the old spot so excited to check it out downtown, should be open by the time you read this.  (Side note, perhaps the closing of Babo will free up Sava to launch another concept downtown?  Here’s hoping.)

Roasting Plant – 312 S State St

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Testing the depths of Ann Arbor’s seemingly insatiable demand for coffee shops, NYC-based Roasting Plant will open their second Michigan location at State and North University (RP has a very popular spot in the First National Building on Campus Martius in downtown Detroit).  I believe this space was most recently the northern portion of Amer’s Deli, they’ve consolidated (along with Chicago Reds and Yogurt Rush, you can really cover all your bases here) into the southern half of the building.  Roasting Plant’s shtick is a custom pneumatic roasting system called Javabot.  I’ve been to the Detroit location, it looks cool and makes a good cup of joe but the competition in that nook of A2 will be stiff, Comet and lab are right nearby for high end stimulation, Espresso Royale, Sweetwaters, Elixir Vitae and of course Starbucks offer a more traditional coffee experience.

Core Spaces Leasing Office – 306 S State St

Pretty boring but in case you were wondering what’s going on in the old Work Gallery Space on State Street, it’s a leasing office for Core Spaces, developer of The Calvin on Huron and conceivably The Collective on Fifth, the building planned for the library lot.  Positive here is that they will renovate the space and only be there a short time, hopefully setting it up nicely for a new tenant (note: I understand the building permit has been temporarily denied as they work on some accessibility issues).  In better news, the gallery has moved to larger space in McKinley Town Center on Division Street

Exscape Smoke Shop & Vape Lounge – 607 E William St

I don’t vape so this opening excites me about as much as a leasing office but for those who do, you’ll have a new option in the former Menna’s Joint space on William just west of State Street.  Exscape has eight locations, primarily in college towns, including one in East Lansing.

Collegian Leasing Office – 1112 S University Ave

The venerable Village Apothecary shut down seemingly overnight back in 2015 and the building (along with many of the others on South U) is probably not long for this world.  There are plans in the works for a redevelopment of much this stretch by developer Hughes Properties, there are two student towers in the planning stages right now.  I understand that most, if not all, of this block will eventually be torn down but for now Hughes is going to use the space as a leasing office for Collegian North and Collegian East.  Not looking to rent a student apartment?  It appears there will also be an ATM, so you know, there’s that.

Smoke’s Poutinerie – 1300 S University Ave

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This is the corner space in the newish Landmark Building at the corner of South U and Forest once home to World of Beer and briefly another bar called Dick Tyler’s Tavern.  The Toronto-based purveyor of gravy fries is growing rapidly with locations planned for Detroit, Ann Arbor and East Lansing.  Honestly this sounds like a great spot for them, this is classic, relatively inexpensive drunk food.  The menu looks absurd, ah to be 22 again.

Odds & Ends

Another business in the Landmark building, Tim Horton’s closed down in late 2016 to make way for MVMNT, an indoor cycling studio which had their grand opening on January 20th.

No word on the former Kai Garden at 116 S Main St although they did recently complete an interior demo and clean out of the building.

Siris, the BBQ and cigar lounge on North Main is still in its seemingly perpetual “coming soon” mode.

Eve in the Bell Tower Hotel closed back in September 2016 after a flood in the restaurant.  Unfortunately it appears the damage was extensive and the closure is permanent.  Eve is looking for a new location and no news regarding the future of the Bell Tower space.

Not sure what’s going on at the old Carter’s Auto Service on Ashley that was once planned as a brewpub.  The building has been cleaned up and painted so certainly some improvement there.

I’m sure I missed a bunch of future openings, hit me with a comment or or social media if you have word on any fun new business developments.  Also, follow me on Twitter for updates like this in real time.

On the RTA and Success in 2018

Back in November the proposed funding for the Regional Transit Authority Master plan failed at the ballot box dashing the hopes of transit proponents and supporters of regionalism across Southeast Michigan.  While certainly a setback, it provides an opportunity for the RTA to step back, reassess and tweak the plan and marketing for another vote in 2018.  Below are a few suggestions and considerations for the next go round.

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First of all, planning an entire mass transit system essentially from scratch for a region containing some 5 million people across 4 counties is a massive undertaking.  The RTA staff and their consultants did an admirable job but there’s always room for improvement.

Refocus on Rail

The current plan relies on Bus Rapid Transit (“BRT”) in the primary corridors, namely Woodward, Gratiot and Michigan Avenue.  At first glance it makes a lot of sense.  BRT is cheaper and more flexible and those roads are massive, 100-120 feet wide through much of the city, up to 200 feet of ROW further from the city center and in the suburbs.  However, these are long corridors, Pontiac to Detroit is some 30 miles making this one of the longest BRT lines in the US.  There’s over 25 intermediate station stops.  Projected travel time is 70 to 80 minutes.  That’s an untenable commute for your average suburbanite with a choice.  BRT is primarily a substitute for light, city rail, think the Chicago L or the New York City Subway.  Those systems work mainly within the city itself, extending out to a few inner ring, city-adjacent suburbs.  To go further out you need to take a regional train, something faster with fewer stops.

There’s a lot of rail infrastructure in place already with clear rights of way in and out of downtown Detroit from a time when the area actually had a commuter rail network.  The trip from Pontiac took 60 minutes on the train (or 41 minutes express) over 50 years ago.  There’s rail going north to Pontiac, east to Mt Clemens and Port Huron, west to Ann Arbor and Plymouth and south to Toledo.  The RTA is only planning on the Ann Arbor service and I think that’s very disappointing.  A relatively high speed train from Troy to downtown Detroit in say 30 minutes or so (essentially possible in the 1940’s so hopefully manageable now) is a truly compelling commute option for your average worker or Tigers game attendee.  Twenty stops on the bus?  Not so much.  I would want to see the other radial routes as well but the Woodward main line makes all kind of sense to start with.  Lastly, and I’ve discussed this previously on this blog, the lines need to go into downtown.  A train to New Center is all but worthless and you’re not going to get travelers that have a choice.  I would love to take the train from Ann Arbor but I’m not going to drive, bus or Uber to the station here, hop the train for an hour and then take a 20 minute Qline ride on the back end to work or play.  That’s just not realistic.

Prepare for and Embrace New Technologies

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I hear from transit detractors all the time that autonomous cars and other emerging technologies are going to eliminate the need for public transit.  That’s not true at all but it’s an objection that needs to be met head on and there are potentially some ways to utilize more tech going forward in the plan.  This is a plan where much of the infrastructure is 10 or more years away yet the tech isn’t all that strong by today’s standards.  Essentially buses with drivers, GPS tracking and signage and shared ticketing with a smartphone app, etc.  Basic things that most major cities have had for years.

This is the home of the auto industry and hopefully home to the future of autonomous vehicles.  Think to the future, think bigger.  Work with Ford’s Chariot service, plan for autonomous vehicles, cars, buses, trains.  Partner with the GM-backed Lyft service for first and last mile connections.  You want votes, aspire and inspire.

Highlight Property Value Increases

Not everyone is going to use public transit especially in the cradle of the automobile.  If you want to get voters on board in places like Macomb County you’re going to have to convince them there’s something in it for them.  With two years to educate folks, focus on what’s important to them.  It’s been well documented that proximity to transit boosts property values and while that was certainly a bullet point in the plan, perhaps it needs to be more of a focus.  Use studies, show heat maps to give people actual potential numbers to consider.  This goes back to my previous point about rail though, the impact of fixed rail transit on property values is much clearer than that of BRT.

Progressive Tiered Millage Rate

This idea is a little more out there and I don’t even know if it’s legal.  The RTA was asking for 1.2 mills from every property owner in the four county region.  I get the argument for regionalism and a working public transit system is good for everyone but it’s still really hard to convince someone living in rural Washtenaw County of the benefits of this system to them.  They’ll see little to none of the property value increases I mentioned above and they’re very unlikely users.  How about a millage that’s tiered based on proximity to service?  A little complicated to be sure and I have no idea if the math works, but something like 0.5 mills withing a mile of a regular bus route.  1.0 mills within a mile of a rapid bus or train line.  2.0 mills within a half mile of a rapid bus or train line.  If you’re more than a mile from any service you pay nothing.

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The backbone of the RTA’s plan is solid and I think fundamentally a BRT-based system is a good place to start.  High speed rail in and out of DOWNTOWN I think is an absolutely necessary part of the service as is increased technology and autonomous vehicle elements.  The rest is just marketing.  The RTA has two years to make changes and improve their outreach and education, this blogger wishes them the best of luck.