Another condo project eyes North Main

[Allan]

Another condo project eyes North Main

BY PAULA GARDNER

[email protected]

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A 30-home condominium project - the first development for a growing local real estate investment company - signals elevated interest in redeveloping Ann Arbor's northern gateway.

Three Oaks Group LLC, assisted by David Kwan of Kwan & Moore Commercial, envisions Terraces On Main as a pedestrian-oriented housing that replaces five deteriorated rental houses along the North Main Street entry to Ann Arbor, said partner Bill Godfrey.

"We're going to take a group of run-down properties on the main artery in the city and redevelop the site," Godfrey said.

The site consists of about three-quarters of an acre on the east side of North Main, immediately south of the Summit Party Store.

An Ann Arbor native, Godfrey said the project should improve the appearance of the corridor while capitalizing on the proximity to Kerrytown and downtown.

"We felt that the next wave of development and redevelopment would be on the north side of Kerrytown," Godfrey said. "It's the next logical place for urban renewal."

The proposal calls for about 30 condominiums ranging from 900 to 1,800 square feet, with an average size of about 1,300 square feet. Pricing is undetermined, but Godfrey said he expects the units to hit the market at $300,000-$400,000.

The site is about two blocks north of the former St. Nicholas Greek Orthodox Church, the cornerstone of a proposal to build two residential towers of 150 units. The Ann Arbor Planning Commission on Sept. 21 tabled action on that project, proposed by a partnership including national builders Toll Brothers.

It's also blocks from Kingsley Lane, a condo proposal led by Peter Allen. That project could begin in 2005, Allen said, adding up to 29 units to the city's housing stock north of downtown.

Three Oaks - which also includes partners John Zdanowski and Teresa Welch - owns 27 commercial properties in Ann Arbor, Ypsilanti and Chelsea.

Terraces On Main would be its first development.

Godfrey said he and Welch worked for McKinley Associates in Ann Arbor for years before starting their own company, giving them familiarity with the downtown office and residential market.

The seven separate parcels were acquired from January 2003 through June 2004, with a total purchase price of about $1.5 million, according to city records.

The concept began in 2002, Godfrey said, when he received a letter from a real estate broker offering three of the properties for sale. Three Oaks made an offer the following day, he said.

"I just knew instinctively that this was the right thing to do," he said. "When you look at a lot of properties and say no to a lot of properties, you know when it's right."

The existing buildings continue in the short-term as rentals, but Godfrey said their value to the city would come from redevelopment - even as the city grapples with affordable housing issues.

"I view them more as blighted than affordable housing," he said.

Godfrey estimated the final market value of the condos could reach $10 million-$12 million.

Three Oaks hopes to gain city approvals over the winter and start work in the spring. Most of the property is zoned for office use and requires rezoning.

The height will vary from three to about four and a half stories, due to the grade change on the property. Parking will be underneath.

The property also poses design challenges due to its location in a flood plain, said architect Brad Moore. That makes about half of the land unbuildable, prompting the plan for construction at the south end of the parcel.

Initial plans for the project also call for underground parking, a common entrance at the north end of the building and no entrance from North Main.

Godfrey said he'll meet with the North Central Property Owners Association to get their feedback on the initial plans.

"There's a community aspect," Godfrey said. "We're a part of Ann Arbor. ... We know the market well, and we're comfortable operating in this niche for a first-time project.

"We think this is going to add a lot to people's first impressions of Ann Arbor."

Paula Gardner covers real estate for Business Review.