and then he said, “it’s nothing personal, ypsilanti, i’ve just decided to pursue more attractive opportunities”

First, it was the three EMU Regents stepping down. Then it was our local paper, the “Courier,” announcing that they would be closing down their Ypsi office. Then, just yesterday, it was Joseph Freed and Associates backing out of their agreement to develop the little 38-acre toxic parcel known as Water Street that all of our hopes and dreams have been pinned to these last several years. If you live here, you have to start wondering if maybe everyone else knows something that you don’t.

So, is it time to cut our losses and turn our backs on Ypsi?

Freed, for what it’s worth, let it be known that it was nothing personal. They cited the poor housing market and other forces at play in the marketplace… Of course, I notice that they’re still pursuing all of their development initiatives to our west, in the more upscale city of Ann Arbor… Perhaps it’s not fair to be pissed at them for going forward with their projects in a city like Ann Arbor, where a reasonable return on investment is more certain, while leaving us back here at square one, but the anger feels right… You’re supposed to feel pissed when you’re left at the alter, right?

I’m a bit calmer about it today than I was yesterday, when I heard the news. Last night, I talked with a friend who convinced me that the prospects for development weren’t altogether dead. Now that we’d been jerked around by two developers (first Biltmore and now Freed), however, it seems unlikely that we’d find another company to come in and build-out the entire site, from top to bottom, doing all the planning, brining in in the tenants, etc. In my friend’s opinion, what will probably happen is that we’ll move a lot of the planning in-house, manage the remediation ourselves, build-out the infrastructure on our own, and then, instead of selling the entire thing to one developer, we’ll probably chop it into lots and sell it off in stages to different developers. Which, it seems reasonable to assume, would spread the risk out more. I don’t hate the idea. It seems to me that it would mean a hell of a lot more expense up front, but the end result might be something more organic and well suited to the neighborhood. The question is, how do you afford to do that, and how do you stage things to maximize your chances for success? If you build housing first, it would put people in the neighborhood and create a demand for retail. But, without the retail already being built-out, would people be willing to take the gamble on downtown? Would you buy a condo if you thought that a car wash might go up in front of it, or a blood plasma donation center, instead of a quaint neighborhood market? It’ll be interesting to see how it goes.

I haven’t been able to verify it, but here’s the blurb that I’m told went out as an “Ann Arbor Business Review” news flash over the MLive network yesterday:

Joseph Freed & Associates and the City of Ypsilanti no longer are negotiating a development agreement for the 800-plus home Water Street project just east of downtown Ypsilanti.

Freed, based in Chicago, was chosen as the developer for the project in April, 17 months after the city dismissed the original developer, Biltmore Properties.

According to a release from the city, Freed decided to halt discussions due to concerns about the local economy and the market for newly constructed homes.

Water Street began in 2000 when the city bought multiple residential and commercial properties totaling 38 acres along Michigan Avenue south to the Huron River. Many of the buildings have been razed and brownfield cleanup has started.

Meanwhile, the city voted in spring to refinance $13.1 million that it had borrowed for initial costs of the project. Payments begin in 2009.

Freed held a community meeting in July to show potential renderings of the project, which was envisioned as a mixed-use project with commercial buildings along Michigan Avenue and a range of housing styles.

Freed also has two mixed-use condo projects in downtown Ann Arbor under development and a third, Glen Ann Place, was denied by the Historic District Commission. That denial has been appealed by Freed.

City Manager Ed Koryzno plans to work with a group of local development experts to determine the next step for the city.

OK, there are a few ways I could go with the post at this point. I could attack the city for buying up the properties in the first place, and running tax-paying entities out of town so the land could sit vacant for several years now. I could ask again why it was that we didn’t know how truly toxic the soil was until we had already taken possession of the property. I could attack the “Courier” for not ferreting out the truth of the matter sooner and alerting us to it. I could demand an explanation about the finances that I can understand. (Brian Robb, god bless his soul, keeps trying to educate me, but I’m not getting it.) I could bring up, once again, that the building that the 555 Gallery was housed in is still sitting vacant, now three years after the community of artists was evicted in order to prepare for Phase II of the Water Street development (pointing out that the Gallery is doing great things to revitalize the area of Detroit they took up residence in after being forced from Ypsi). Or, I could offer a creative solution that would make everything right. Unfortunately, nothing comes to mind. (Actually, I was thinking that we could move the infamous homeless encampment out of the woods and onto the Water Street parcel, so that the police could keep a better eye on them, but I’m afraid my readers might think I’m kidding… My other idea, which I also don’t think that people would take seriously, is to use the space for a new county jail.)

I don’t know what to think anymore. At the beginning, I was willing to give our Mayor and City Council the benefit of the doubt. It was a risky move, but, given our decreasing tax base, something bold had to be done. In retrospect, it seems like a colossal blunder, but what’s done is done. The big question now is how our Mayor and City Council will react… What kind of team can they assemble to sort the situation out? What kind of vision will they come up with, and will they be able to articulate it in such a way that people buy-in to it? My hope is that they leverage every contact and resource that we as a community have, and come up with something truly brilliant. I just don’t know that it’s possible.

Maybe it’s time for a town meeting.

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21 Comments

  1. mark
    Posted December 10, 2006 at 2:04 am | Permalink

    And to answer my question above, no, it’s not time to leave Ypsi…. unless you’re spineless sack of shit, in which case we don’t need you anyway.

    Pardon the vulgarity, but I’m very tired.

  2. trusty getto
    Posted December 10, 2006 at 10:51 am | Permalink

    As I’ve heard many, many times, what we need is something truly unique. Plymouth- and Northville-like condos with a Walgreens are simply not going to fly here. It ain’t why I chose this community to live in, and I don’t know anybody who says it’s why they moved here or remain here. Don’t we all know it? It’s the outside developers that seem to take a while to figure that out, and once they do, they bolt.

    I’ve asked the question before, and nobody to date has provided a persuasive answer. If we already can’t fill up downtown with retail, why does anyone think we will magically fill up a Water Street development with successful, profitable retail?

    We need something truly unique to make that kind of development work. We have an alternative music scene here. Why not incorporate an amphitheater or small concert venue into the project? We have a decent art scene here (used to be bigger, as I recall). Why not try to incorporate an “artist” community?

    I’m not saying these will work or that they are even reasonable or realistic ideas. But it seems kind of obvious that something other than the “canned” development model will be needed in this economy if we are going to make this work.

    I do agree with what you seem to suggest: that instead of focusing on how many times the ball’s been dropped or who may be responsible for dropping it, let’s focus on picking it up and scoring this time. I just hope we can count on honest, frank communication with a high degree of realism in future interaction with our city gov’t.

  3. Anonymous
    Posted December 10, 2006 at 11:36 am | Permalink

    A resident, Jim Fink, came to city council two years ago and asked this question.

    First some background, At the time, the city was only admitting to spending about $10 million though we knew they were up to $17 million for Water Street. So at $17 million and counting here is what Jim asked.

    He asked Council, “How much is too much? We can all agree that $50 million is too much. But when is it too much. Is $20 million, $30 million? When is it that we have to say stop?”

    Barry Larue responded later during council business, we have to spend whatever it takes. Farmer said that we can’t stop now.

    That is how organizations go bankrupt. They can’t see that they need to stop spending, they just keep spending, thinking more money will solve the problems.

    Gambling addicts do the same thing. They know they are in trouble, but they have convinced themselves that with just one play, they can win it all back. It never happens.

    Freed was that gamble. Even giving the land to Freed, Freed wouldn’t take it.

    Your friends proposal means the city is going to become the developer. Oh please, the city couldn’t even build a garbage dumpster without screwing that up.

    Look at how many closed meetings they have had over Water Street. This will just continue, with the city working behind closed doors, a council that that just paid out $7,000 to a former employee because they can’t figure out how to pay someone. The council only hires for two jobs, clerk and city manager and look at the clerk fiasco with hiring a new clerk.

    Now the Council and city staff are going to become big time land specualtors and developers.

    If the pros like Freed and Biltmore said the finances won’t work, why is Ypsilanti City Hall thinks they are smarter? I can give you a very long laundry list of develoeprs that Farmer spoke to over the last three years and they all told her the market is soft and the finances don’t work for residential. Yet the City kept pressing their position, like Rumsfeld, not willing to consider alternatives. The City telling residents, stay the course.

    Remember, almost three years ago, when Ikea bailed on Royal Oak and before they decided on Canton, I sugested to the City planning department and the mayor we should put Ikea at Water Street.

    When Ikea was waivering in Canton I again went back and said we need to get Ikea for Water Street. The City’s response, we don’t want a blue building in our downtown. Farmer said we need homes, not a big box store next to our beuatiful river.

    If the City is the developer, the city will continue to have closed sessions if they are running this project becasue they don’t want you to know what is going on. They never have and it won’t change now.

    It was the city that took a $3 to 4 million Water Street project in 2000 and cranked it up to $40 million.

    Today, for every month Water Street is vacant, it costs the city $80,000 in interest.

    That interest is more in one month than the city pays for a cop with benefits and retirement in one year. This Water Street project is costing the city of Ypsilanti 12 cops per year.

    Three months of interest is the City’s entire recreation budget.

    Six months of interest would restore the Freighthouse.

    Your friends proposal is to bring the development in house. The City alrady did an in house project, it was the garbage dumpsters downtown. It was a $1 million project that was supposed to be completed in three months.

    Look how well that turned out. Two years behind schedule. Still not finished. One business owner is suing over a flood of their property. Another business owner closed. Now the city and DDA are getting ready to sue the contractor and hire a new contractor to finish the project.

    If the new plan is to bring this in house and let the City run this project, we are all in trouble. Moreover, what money are they going to use?

    Oh wait, I know they will want to use the income tax money to borrow the money and will promise to pay it back once the project is finished. Sort of like the feds borrowing the money from the Social Security Fund

    The City’s credit card is maxed out, there is a triple mortgage on the house, the city has maxed out their bond debt. We have no cushion and no reserves.

    The city has already spent $23 million of taxpayer money on Water Street and in the last two months authorized another $20 million in new debt to be paid back from property taxes over the next 30 years.

    $43 million folks and now the city wants to become their own developer.

    We don’t need a Town Hall meeting, we need an intervention.

    Cheers!

    – Steve

  4. Stacey
    Posted December 10, 2006 at 11:37 am | Permalink

    Maybe something like this:

    http://www.sunward.org/

    Add live burlesque theater, it would be progressive and retro at the same time.

  5. mark
    Posted December 10, 2006 at 10:08 pm | Permalink

    I read through your comment a few times now, Steve, and I don’t see any recommendation for a way out. Let’s say that you’re right about everything, what now? How do we get out of the hole we’ve dug ourselves into before the walls start collapsing around us? Cameron and Stacey are offering up good ideas to get the ball rolling. What’s your idea? And, by the way, I’m being serious. I’m not being snide when I say that. I really want to know what you’d recommend we do at this specific point in time. I agree that handling the remediation and planning ourselves is an extremely risky proposition, but unless someone comes to the table with something better, that’s probably the way it’s going to go. We, as a community, really need to come together and look at the situation without the baggage we’ve all been carrying around with us.

    Has anyone started a

  6. mark
    Posted December 10, 2006 at 10:13 pm | Permalink

    Assuming we aren

  7. Anonymous
    Posted December 10, 2006 at 11:59 pm | Permalink

    Mark,

    The first thing we should do is quit spending more money. Stop no more, thats it.

    Then we go back into the market and we apologize for being jerks. The city has pissed off way too many developers through a planning department that is abusive of power and unreasonable in its actions and demands. Then we apologize to the citizens for screwing this up.

    Then we open the books, no more secrets. Every penny spent is documented. We know the debts, who we owe and when. No more games like the FAQ that has since been removed form the City that said we had grant dollars but when you actually looked at the award letter not at the city’s website but a the state did we find out much of the award was a loan. They sort of forgot to mention that part.

    Then fire the lawyers and consultants. This project has been run by outside law firms billing at outrageous rates. That is enough.

    Then we apologize to the citizens who have come down for 5 years, first to help, and then when shunned, came to say, watch out you have problem. To them we apologize and then ask nicely if they will come back and help. This time we promise to listen.

    The city screwed up, admit the mistake and apologize.

    Then quit threatening the police and fire for those mistakes. To bury the mistakes, the city has routinely threatened to cut police and fire. Watch, the city will do this again, they will do this in the coming year, claiming we have no money and need to cut police and fire.

    The reason we have no money is because the city hasn’t been willing to cut in other areas and has spent literally millions of dollars on a failed project.

    You should see the salries and benies they pay people. The DDA director has a loaded salary of something like $50,000 a year. $58,000 for an interim clerk. Ouch!

    Then we start to try and find a buyer. And we have to be open to other ideas.

    Retailers have come to the city, the city said no.

    Manufacturing firms asked, and were told no.

    Civic projects like a ball park, auditorium, and other uses were turned down.

    There was a single minded focus on residential that anyone thinking of a different idea was told to go away.

    We should be open to a business park, offices, even a tower which could be offices, retail and residential, but requires a smaller foot print for clean-up.

    We have to rebuild those bridges with our citizens, our business owners and the development community. This problem is totally fixable.

    However, let me tell you what is really going to happen.

    More closed session meeting with attorneys costing $250 an hour.

    More grants and loans to tear down the buildings. A planning department that is going to try and become a developer. And a City council, that will just sit there and watch it happen and will shrug their shoulders and exclaim, we are doing the best we can.

    Folks, their best is not good enough.

    This is fixable, we can still make it happen, but they don’t have the right people working on this projhect and worse, they have surrounded themselves with yes men and courtisans who are telling them they are doing everything perfect and to stay the course.

    – Steve

  8. Hillary
    Posted December 11, 2006 at 12:18 am | Permalink

    mark: The time for design input and single family housing was 2-4 yrs ago. The city has got to give up their romantic ideas about what should be built there. People need to accept what is viable. Someone might be able to make a profit with a mix of hi-rise condominiums and apartment buildings on Michigan Avenue with ground floor retail. (Commuter rail + Google = Demand) Maybe it would be more profitable if commercial space was added along the waterfront. Maybe someone would like to use part of it for an industrial use. Re-issue the RFP with no constraints on height or use, and see what can be built. Invite proposals for parcels as well as the entire property.

    In the meanwhile, an income tax is probably a necessity. Income taxes suck, but they’re better than tax judgments and receivership.

  9. Dale
    Posted December 11, 2006 at 12:52 am | Permalink

    Wait, Steve — who’s running the planning department in Ypsi? By my count, there were about 2 people 4 months ago; maybe that’s shot up to 2.5 megalomaniacs now? Or 3? And do they answer to the city manager, or not?

    Who, in your mind, is in charge? And why?

  10. ol' e cross
    Posted December 11, 2006 at 9:54 am | Permalink

    For the most part, I think Water Street was a decent idea. Environmental clean up, greenways, and urban in-fill development are all good things. And, they all cost money. (Money businesses aren

  11. Ted Glass
    Posted December 11, 2006 at 10:50 am | Permalink

    I know they apparently signed a lease in Ann Arbor, but is Google still talking about ultimately building something? Has anyone called them?

  12. egpenet
    Posted December 11, 2006 at 11:02 am | Permalink

    Steve is right from both civic and business points of view. In fact, civic-mindedness should make the city even MORE conservative and cautious, not less.

    In hindsight, the economic and demographic changes in S.E. lower Michigan, and specifically in eastern Washtenaw/western Wayne WERE predicted by a few … but hope were very high that Ford and GM were just TOO big and TOO important and TOO terrific that they would be approaching failure. Those hopes have been dashed.

    Steve is right, and I’ve been ranting about this as well, a residential focus in Water Street ain’t it. What matters is that a taxpaying entity or entities are devloped there and elsewhere in the city. Whatever is built should NOT be “oldtimey” or something Uncle Walt would approve for a Florida development.

    And by the way, look at all of the stupidly expensive developer, architectural and civic designs have gone down the toilet in Louisiana, Mississippi and Alabama since the hurricanes. People who work in the city and cannot afford $150,000 condos or $1000 a month condos are still living in trailers and motels, the waterfronts are NOT rebuilt and now they are having a health care crisis because the imported/embedded clean-up workers are in need … and the hospitals haven’t been rebuilt, restaffed, etc.

    I have jokingly suggested tghat we build a very large jail on the site … a truly state of the art facility … ecologically and environmentally. However, it would be a private facility, run by us, an Abulanti … with low-level holding, medium security, high security and torture areas using the dancers from DeJaVu. (What a great asset that is downtown.) We’d run it privately without Minzey in the picture and take in prisoners from all over the state. Anyway …

    We need a civic, entertainment, recreational facility, etc. … a drawing card … on the site, which would pay taxes, have a profitable income and help increase the draw we already have for music, arts, food, history. We are ALREADY the best downtown in this part of the county. Between Downtown and Depot Town … Ypsilanti IS a drawing card. Ask Linda French who most of her customers are … it ain’t us!
    Ask Quinn’s, ask Luwak, etc. We, the people, neeeeed to do to council and city management what we just did to the county, with our great police chief’s prodding … bitch.

    Steve is right and Mark, you too … we need a public rant session dedicated to making OUR desires clear … NOT another dog and pony show in council chambers of condo designs that no one can afford to build at a profit or occupy at a reasonable cost.

    We need to yell STOP! Apologize. Open the books. Contact outside business interests and get that property cooking (instead of percolating). Stop! Enough!

    Other writers above are also right … we’re doing fine in Ypsilanti. We love it here. Ups and downs. And there are nough of us committed to the city, lifestyle, history, arts and entertainment, street life, to get the city going in a smart direction. We have allowed the leash to get too extended. Picket if we have to … wrap city hall in duct tape … weld the doors shut … storm the Bastille … whatever it takes.

    And now Parkridge? We’re going to be slum landlords on top of all of this? Yikes!

    My neck hurts, too, from the civic whiplash.

  13. Jennyfurann
    Posted December 11, 2006 at 1:31 pm | Permalink

    Ok so how does one go about organizing any of this? I know that just reading about all of this has made me realize it is time to give some of my time and efforts to the cause… but what needs to be done? How does one go about any of this? Seems like there is enough talk and ideas here to start something. Forgive my ignorance (as I have never been involved in such things – or seen them happen, really), but how?

    I’ll volunteer my time and talents… I just need direction :)

    The next council meeting is Dec 19th (3rd Tuesday?)
    Blue Ribbon Finance Commission is this Wednesday (Dec 13th)

  14. mark
    Posted December 11, 2006 at 9:20 pm | Permalink

    Jenny, I need to talk with the rest of the YpsiVotes gang, but I’m thinking that we might want to host two community events in the near future – one exploring the liklihood of a downtown grocery, and one on the subject of Water Street and our options. If you’d like to be involved in the planning of one or both, let me know and I’ll add you to the email list. There are other things you could do as well, but this might be a good way to get your feet wet.

  15. ol' e cross
    Posted December 12, 2006 at 10:21 am | Permalink

    Keep in mind, Water Street is on the river. People like rivers. People pay extra money to live on them. Before we move here, I used to stand by the river and think, “God, it’d be great to live this close to a river.”

    After time, maybe we take it for granted. For me, talk of manufacturing, industrial parks and the like is a miserable waste of the property’s inherent value as waterfront. Talk of ballparks and such is fine if we’re willing to lose the tax dollars and foot the bill for another park.

  16. Paul Schreiber
    Posted December 12, 2006 at 12:03 pm | Permalink

    Comment from: egpenet
    “And now Parkridge? We’re going to be slum landlords on top of all of this? Yikes!”

    I appreciate the interest in Parkview (not Parkridge) Apartments. City Council has no intention of being slum landlords of Parkview Apartments. The Ypsilanti Housing Commission/Chesapeake Community Advisors plan approved by city council acquires Parkview for $100 and provides $4 million in tax credit financing for renovations. Parkview ownership would be transferred to a private corporation formed by the YHC with a local board of directors. Portable Section 8 vouchers would be available for the Parkview residents. A private management company would run the day-to-day operations. Parkview will not be public housing nor will it be run by the city or the YHC.

    HUD may not grandfather the YHC/CCA plan. In that case, they will offer it for market value next year. Last summer, HUD offered Parkview to the city for a market value of $3.7 million. The city declined. Let

  17. Ted Glass
    Posted December 12, 2006 at 12:56 pm | Permalink

    Is anyone going to answer my Google question?

    Has anyone in our City government approached them and let them know about this “opportunity”? We keep talking about this Freed thing like it’s terrible, but it may not be so terrible from the perspective of a company looking to build a presence here. We have 30+ acres available in downtown, on the river. We’ve already got all the parcels pulled together, and we’re looking to deal. This could be just what they’re looking for. Has anyone called Ann Arbor SPARK (the Washtenaw County economic development group) to tell them that the land has become available?

  18. Anonymous
    Posted December 12, 2006 at 1:17 pm | Permalink

    Ted,

    You know most of the folks over at Spark, just call them and ask. Then let us all know what they tell you.

    BTW, Google just signed a 4-year lease on the their A2 digs.

    Cheers!

    – Steve

  19. Ted Glass
    Posted December 12, 2006 at 1:30 pm | Permalink

    If I knew them well, I would. And, I know about the 4 year lease, but I’ve heard that they ultimately want to build. It may be a shot int he dark, but what do we have to lose?

  20. mark
    Posted December 12, 2006 at 8:37 pm | Permalink

    I just looked it up and the person at SPARK whose job it is to work with corporate site selectors is Jim Gartin. There are probably people with greater access to the higher-ups at Google, but it probably wouldn’t be bad for someone in City Hall to give him this guy a call and run the idea by him. Here’s his contact information.

    734 821-0074

    james@AnnArborSPARK.org.

  21. egpenet
    Posted December 12, 2006 at 10:31 pm | Permalink

    Thanks for the input Mr. Mayor … and I stand corrected on the name and the process. It’s great to get it away from HUD and to take it out of the realm of public housing … I will wait to see if it does not degenerate into ghettohood once again.

    My rantings about Water Streeeet are meant to add fuel to the fire, Mr. Mayor. Rant as I do, I cannot stop the nervous tics I have devloped watching as I have since I moved here … when a developer from Detroit was going to locate a hotel there … the same hotel now located across I-94. Oh, and he had investors for the Depot, too. $40 million and counting …

    We’ve supported you because you could pull it all together given time and good help. We feel you need some intermediate steps to get Water Streeeeeet on track and making some bucks. Pete’s suggestions might help. Other ideas would be welcome … if just for debt service, let alone to solve the entire package.

    If the 20/20 group are the same names and faces that got us to this point … it will be politically difficult to rebuild citizen trust. For now, you and our new council appear to have support and time you need.

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