The university will move forward with a plan to acquire up to 49 properties near Central Campus as part of phase two of an effort to develop affordable, on-campus housing options for students in the coming years.
The Ann Arbor properties — located along South Division Street between East Madison and Hill streets, and along E. Madison and John streets between South Division and South Fifth Avenue — will be purchased from Regent Ronald Weiser, who also is a local real estate investor, at a total cost not to exceed $75 million. Funding for the purchases of the private properties will be provided from university reserves.
The cost of the properties will cover acquisition, closing costs, broker fees, and other costs related to the transaction of rental properties. Weiser will have no financial gain from the sale of the properties.
The Board of Regents authorized purchasing the properties needed for phase two at its May 18 meeting.
Regents adopted a resolution Feb. 16 as a step toward potentially exercising its eminent domain powers, so university representatives may negotiate to acquire any properties necessary to complete phase two, as much of that property is privately owned.
Of the 49 properties, five are not currently owned or under contract by Weiser. U-M has not initiated eminent domain proceedings on any of those properties at this time.
U-M intends to keep the approximately 300 beds currently provided by the properties active in the Ann Arbor housing market by honoring existing tenant contracts and continuing to lease to tenants until phase two is underway.
After the property ownership has transferred to the university, each property will be managed by a local property manager on behalf of the university.
Site work for phase one
In addition to the second phase of adding more student housing, phase one of building a new residential and dining facility will add 2,300 undergraduate beds and a 900-seat dining hall on Central Campus.
Regents approved the new housing and dining facility between East Hoover Avenue and Hill Street at their February board meeting.
The project, which originally planned to seek final budget approval in May, will now seek final approval in September to allow more time to finalize the design and complete the bidding process.
In order to keep the project on schedule, regents voted May 18 to continue site work that will begin this summer and not exceed $30 million. It will include drilling geothermal borings and ordering materials. All expenses will be rolled into the final project budget.
The university also will enter into a development agreement with American Campus Communities to manage the project and meet the proposed project schedule. The development agreement with ACC will be contingent on final board approval of the project budget in September.