Title
Resolution to Approve a Grant Agreement with the Ann Arbor Housing Commission and Ann Arbor Housing Development Corporation, Approve the Purchase of Property at 800 Victors Way for Affordable Housing, and Appropriate $1,200,000.00 (8 Votes Required)
Memorandum
This resolution is requested by the Ann Arbor Housing Commission (AAHC) to appropriate and grant $1,200,000.00 from the Ann Arbor Affordable Housing Fund to the Ann Arbor Housing Development Corporation (AAHDC) for the acquisition of an affordable housing project at 800 Victors Way in the City of Ann Arbor.
The Ann Arbor Housing Development Corporation Commission (AAHDC), a Michigan nonprofit whose sole member is the Ann Arbor Housing Commission (AAHC), is requesting City Council approval to acquire property commonly known as Avia Lofts located at 800 Victors Way in Ann Arbor, Michigan. The property will be acquired by a wholly owned subsidiary of the AAHDC and the amount paid for the property will be the lessor of (i) $14,200,000.00 or, (ii) the appraised value, plus all applicable development and closing costs. City Council must approve the acquisition under Chapter 8, Section 1:209(3) of the Ann Arbor City Code.
This property is a 114-unit acquisition and rehab of a market rate property the AAHDC will acquire primarily with the use of 501(c)(3) tax exempt bonds sold by the Ann Arbor Housing Commission. All of the units will be converted to affordable for households at 80% AMI or less and a minimum of 40% of the units will be affordable to households at 60% AMI, as required by statute. The deed will include a restriction that ensures that at least 40% of the units will be affordable to households whose income is 60% of the Area Median Income or less.
An appraisal has been ordered. 800 Victors Way’s 2026 SEV is $8,200,000 for Tax Parcel Number 09-12-09-201-016.
COM AT W 1/4 COR OF SECTION 9, T3S, R6E, TH N 1 DEG 40 MIN 20 SEC W 1078.28 FT, TH ALNG SLY ROW OF VICTOR WAY THE FOLLOWING FOUR COURSES: N 87 DEG 21 MIN 10 SEC E 211.28 FT, N 75 DEG 55 MIN 50 SEC E 201.99 FT, ELY 355.48 FT ALNG ARC OF 510.02 FT RAD CURV RT, CH BEARS S 72 DEG 40 MIN 50 SEC E 348.33 FT & S 52 DEG 42 MIN 40 SEC E 195 FT TO POB, TH CONT S 52 DEG 42 MIN 40 SEC E 240 FT, TH 78.86 FT ALNG A 536.03 FT RAD CURV LT, CH BEARS S 56 DEG 55 MIN 35 SEC E 78.79 FT, TH S 37 DEG 17 MIN 10 SEC W 412.59 FT, TH N 63 DEG 51 MIN W 249.56 FT ALNG NLY I-94 ROW, TH N 52 DEG 42 MIN 50 SEC W 112 FT, TH N 42 DEG 5 MIN 40 SEC E 456.62 TO POB BEING PRT OF LOT 1 ATRIUM OFFICE CENTER & OTHER LANDS IN NW 1/4 SEC 9, T3S, R6E, CONTAINING 3.4 AC +/- SUBJECT TO EASEMENTS AND RESTRICTION OF RECORD
The AAHDC has entered into a Memorandum of Understanding (MOU) with Sequel Companies, LLC to co-develop the property. The AAHC will be the property manager. The total development costs are estimated to be $19,500,000.00 and the projected sources of funding include: 501(c)3 Tax Exempt Bonds (a portion of which are credit enhanced by Fannie Mae or Freddie Mac), the Ann Arbor Area Community Foundation, Sequel Companies, Affordable Housing Funds and the Affordable Housing Millage.
Both the Affordable Housing Fund and the Affordable Housing Millage are restricted to 60% AMI households or less. If these funds combined exceed 40% of the total funds, then the percent of units restricted to 60% AMI households or less will be increased to match the % of funding. If all funding sources listed above are secured, these two funding sources will be less than 10% of the total funding sources. The project will be able to provide housing to households at 30% AMI or less through tenant-based rental vouchers to be provided by the Ann Arbor Housing Commission.
This resolution is intended to serve three purposes: to allocate $1,200,000.00 Affordable Housing funds for the acquisition of an affordable housing project, to execute a grant agreement, and to comply with City Ordinance Chapter 8 Section 1:209.
Budget/Fiscal Impact: Funding is available in the fund balance of the Affordable Housing Fund. It is requested the $1,200,000.00 be appropriated from the fund balance to the FY 2026 Affordable Housing Fund expenditure budget.
Staff
Prepared by: Jennifer Hall, Executive Director, Ann Arbor Housing Commission
Reviewed by: Marti Praschan, Chief Financial Officer
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, The AAHC requests the City authorize a wholly owned subsidiary of the Ann Arbor Housing Development Corporation (AAHDC), a Michigan non-profit corporation, whose sole member is the AAHC, to enter into a purchase and sales agreement for the acquisition of 800 Victors Way to meet the City’s affordable housing goals and advance the development process; and
Whereas, Funding is available in the Ann Arbor Affordable Housing Fund;
RESOLVED, That City Council approves the acquisition and purchase of the property commonly known as 800 Victors Way by a wholly owned subsidiary of the Ann Arbor Housing Development Corporation for the lesser of (i) $14,200,000.00 or, (ii) the appraised value, plus all applicable development and closing costs, as required by Chapter 8, Section 1:209(3) of Ann Arbor City Code;
RESOLVED, That City Council approves an Affordable Housing Fund Grant Agreement in substantially the form attached, with the Ann Arbor Housing Commission and the Ann Arbor Housing Development Corporation for the acquisition and development of affordable housing at 800 Victors Way in the amount of $1,200,000.00 (“Grant Agreement);
RESOLVED, That the Mayor and City Clerk are authorized and directed to sign the Grant Agreement after approval by the City Administrator and City Attorney;
RESOLVED, That City Council appropriates $1,200,000.00 from the fund balance of Affordable Housing Fund to the FY 2026 Ann Arbor Housing Commission expenditure budget in the Affordable Housing Fund;
RESOLVED, That all amounts herein are without regard to fiscal year;
RESOLVED, That City Council approves a permanent recorded restriction on the property requiring a minimum of 40% of the units to be restricted to households at 60% AMI or less, unless the percentage of all city funds to the total project costs is greater than 40%, in which case the minimum percentage of restricted units will be equal to that greater percentage; and
RESOLVED, That the City Administrator is authorized to take all appropriate actions to implement this resolution and the Grant Agreement, including the exercise of all determinations and authority delegated to the City under the Grant Agreement and the negotiation, execution, and management of the recorded restriction and ancillary documents, instruments, and agreements.