Title
Resolution to Approve a Purchase and Sale Agreement for the Kline’s Lot (8 Votes Required)
Memorandum
The Kline’s Lot is an approximately 1.31-acre City-owned parcel located on the northeast corner of South Ashley Street and West William Street 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. The property is currently improved as a surface parking lot.
Pursuant to Resolution R-25-049, adopted by City Council on February 18, 2025, the City entered into a Professional Services Agreement with commercial real estate broker CBRE to solicit proposals from private development companies for the purchase and development of the site. Five development teams submitted proposals. On September 15, 2025, pursuant to Resolution R-25-1578, City Council selected Hines Development as the most responsive proposal and authorized the City Administrator to enter into negotiations with the company.
The selection was based on several factors, including: (i) the highest overall purchase price, (ii) the largest number of proposed dwelling units, (iii) a strong national track record of comparable projects, (iv) demonstrated success with public-private partnerships, and (v) incorporation of sustainable design features.
The proposal contemplates a predominantly residential mixed-use development with ground-floor retail, to be constructed in two phases. The purchase price for the property will be based on the number of residential units ultimately approved through the Site Plan process. The agreed-upon price is $31,500.00 per approved residential unit, subject to a minimum purchase price of $14,175,000.00.
This resolution approves a Purchase and Sale Agreement for the property. The agreement memorializes the principal terms negotiated by the parties and establishes other contractual provisions governing the conveyance of the property, including due diligence and approval timelines, closing requirements, and certain project features. This resolution also authorizes the City Administrator to negotiate and finalize any other instruments and agreements that may be needed to conclude the transaction and complete the sale and development of the parcel.
Budget / Fiscal Impact: The most significant financial impacts associated with this transaction are the one-time sale proceeds received by the City and the future property tax revenue generated by the site, which is currently tax-exempt.
Costs associated with the conveyance of the property are set forth in the Purchase and Sale Agreement. Most such costs are addressed at closing and paid from the sale proceeds.
Staff
Prepared by: Joseph R. Giant, Director of Economic Development
Reviewed by: Milton Dohoney Jr., City Administrator
Marti Praschan, CFO
Atleen Kaur, City Attorney
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, The City owns an approximately 1.31-acre parcel located at the northeast corner of South Ashley Street and West William Street in downtown Ann Arbor (the “Property”);
Whereas, The City obtained an independent appraisal of the Property and subsequently conducted an open, competitive solicitation process requiring proposers to identify a proposed purchase price and development concept of the Property, through which five (5) proposals were received;
Whereas, Pursuant to Resolution R-25-1578, City Council determined that Hines Development (“Hines”) submitted the most competitive proposal, offering to purchase the Property for a price equal to $31,500.00 per approved residential unit, subject to a minimum purchase price of $14,175,000.00, and to develop a residential mixed-use project in two phases consisting of at least 450 residential units and ground-floor retail (the “Project”);
Whereas, The City and Hines have negotiated a purchase and sale agreement setting forth the terms under which the City would sell the Property to Hines and Hines would purchase and develop the Property as the Project; and
Whereas, Redevelopment of the Property from surface parking to high-density housing in an area near jobs, services, and amenities advances several City goals, including increasing housing supply, increasing the City’s tax base, and furthering environmental sustainability;
RESOLVED, That City Council approves an agreement for purchase and sale of the Property (“Purchase Agreement”) in substantially the form attached, and the Mayor and City Clerk are authorized and directed to sign the Purchase Agreement after approval by the City Attorney and City Administrator;
RESOLVED, That City Council approves the granting and acceptance of all easements that are contemplated by the Purchase Agreement or appropriate for the approval, amendment, construction, or operation of the Project or the sale of the Property, or pursuant to an approved site plan for the Project, such as right-of-way, utilities, access, solid waste, or maintenance, after such easements are approved by the City Administrator and City Attorney;
RESOLVED, That, where required, the Mayor and Clerk are authorized and directed to sign the Purchase Agreement and all easements, instruments, documents, and other agreements contemplated by this resolution, after approval by the City Administrator and City Attorney;
RESOLVED, That the proceeds from the sale of the Property shall be deposited in the General Fund Non-Departmental Revenue Budget; and
RESOLVED, That the City Administrator is authorized to take all appropriate actions to implement this resolution and the Purchase Agreement, to exercise all determinations and authority delegated to the City under the Purchase Agreement and any agreement contemplated by this resolution, and to negotiate, execute, and manage all documents, instruments, and agreements contemplated by this resolution, or related to the Project or the sale of the Property, including any Project development agreements, such execution being upon approval by the City Attorney.