City Council approves agreement for future housing development on downtown parking lot site

The Ann Arbor City Council on Tuesday, Sept. 8, approved a purchase agreement with Hines for the future sale and redevelopment of the city-owned parking lot at 309 S. Ashley St., located at the northeast corner of South Ashley and West William streets in downtown Ann Arbor. The site is commonly referred to as the “Kline’s Lot” because it formerly served as the parking lot for Kline’s Department Store.

Under the purchase agreement, Hines’ project must include at least 450 market-rate, all-electric residential units and at least 10,000 square feet of ground-floor commercial space. Hines’ initial concept included approximately 554 residential units, although the final number may change as the project proceeds through design and review. The project is planned in two phases, beginning with a structure on the south side of the site.

“This agreement is an important step toward transforming a parking lot into new housing and expanding the city’s property tax base,” said Joe Giant, Ann Arbor’s economic development director. “More residents downtown will help create a more economically resilient city core and give a boost to businesses, restaurants and events that make Ann Arbor vibrant and distinctive.”

Council’s approval of the purchase agreement does not complete the sale of the approximately 1.31-acre property. Hines must first complete its due diligence and, if it elects to proceed, pursue the required development approvals through the city’s normal review process, including Planning Commission approval of a site plan meeting the agreement’s minimum design criteria.

Closing and transfer of the property would occur later, after applicable conditions of the purchase agreement are addressed. Hines has committed to begin construction of the first phase of the project within 180 days of closing.

The purchase price will be determined by the number of market-rate residential units ultimately approved for construction. Hines will pay $31,500 per approved residential unit, with a minimum purchase price of $14.175 million. Proceeds from the eventual property sale will be deposited in the city’s General Fund.

Hines was selected through a competitive process based on factors including its proposed purchase price and number of housing units, experience with comparable developments and public-private partnerships, and sustainability features.

“We’re excited about the opportunity to bring new housing, retail and long-term investment to this important downtown site,” said Brad Soderwall, senior managing director at Hines. “We look forward to working with the city and community through the review process to shape a project that adds to the vitality of downtown Ann Arbor.”

Note: The image featured on this page is a rendering. Renderings are intended to depict the type of project contemplated for the site, but the actual project will be approved through the site plan process.

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Media Contact: 

Steve Kilar, Communications Director, skilar@a2gov.org