Title
Resolution to Authorize the City Administrator to Negotiate with the Ann Arbor District Library for the Sale of Air Rights at Library Lane Conditioned on Voter Approval of Charter Amendments
Memorandum
The attached resolution details the City Administrator’s expectations of a transaction between the Ann Arbor District Library (AADL) and the City of Ann Arbor, should voters agree to change the City Charter at the August 5, 2025 special election. A change to City Charter, if approved, would authorize sale of the air rights at Library Lane.
The actual transaction would be captured in one or more agreements between the parties that will be prepared if the voters agree to change the City Charter. The agreements would need to be approved by City Council and the Ann Arbor District Library Board.
AADL needs a new main facility. The current facility is inadequate to meet their current and future needs.
The current use of the Library Lane parcel is primarily as a parking deck with underground capacity. The parking deck carries bond debt and will remain under City of Ann Arbor ownership at least until the bonds are retired (currently scheduled for 2035).
If the proposed Charter amendments are approved in August 2025, the City proposes to sell the air rights over the Library Lane parcel to AADL for the sum of $1. AADL proposes to construct a building above the parking deck on the Library Lane parcel as an addition to the project on their current site working through the City’s existing zoning and planning processes.
AADL’s vision is for both buildings to connect on the second floor. The building on the Library Lane parcel would include some library operations plus, at the City’s request, a mixture of housing units including units aimed at the arts community. The housing mix also is proposed to include some market rate units, including condos, and some affordable units. AADL would also design and program approximately 10,000 square feet of outdoor public space on the ground level of the Library Lane parcel building.
AADL would select its own development partners to construct the project and the City would assign someone to ensure coordination through the development process once the project commences. AADL intends to do a community engagement process to gain public input on the building design. AADL’s plans include some focused outreach to the small business community.
This proposal does not include any new taxes on residents. The housing and other privately-owned elements of the proposed development will contribute to the City’s tax base.
Once the bonds are paid off on the City-owned parking deck, the City may elect to sell the deck to AADL. If the City decides to sell the parking deck and AADL decides to purchase it, the parties will split the cost of an appraisal 50/50.
Budget/Fiscal Impact The air rights to the Library Lane parcel are proposed to be sold for $1 and certain commitments from AADL if the voters agree to change the City Charter at the August 5, 2025 special election. AADL would be responsible for all construction and operational costs of the proposed development. There would be no immediate financial impacts to the City. There may be some disruption to parking revenue generation from the deck during construction. Future development to the site would generate potential real and personal property tax revenue.
Staff
Prepared by: Milton Dohoney Jr., City Administrator
Reviewed by: Marti Praschan, CFO
Atleen Kaur, City Attorney
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, The City of Ann Arbor has declared a housing crisis in the City;
Whereas, The Ann Arbor District Library (AADL) has determined that its current main facility is insufficient to serve the current and future needs of its patrons;
Whereas, The City owns a parcel, referred to as the Library Lane parking deck, adjacent to the current Downtown Library facility;
Whereas, AADL has decided to demolish its Downtown Library site and replace it with a new mixed-use building including housing and a new Downtown Library;
Whereas, The City is currently restricted in its use of the Library Lane parcel and associated parcels;
Whereas, Should the voters decide to amend the City Charter, the City and AADL have developed a framework calling for the City to sell to AADL the development rights to Library Lane for the sum of $1 and certain housing and other commitments;
Whereas, The City would retain ownership of the parking structure that is part of the Library Lane parcel at least through the bond debt repayment period, currently anticipated to be 2035;
Whereas, The City’s expectation is that AADL will construct mixed use towers that are potentially connected on the second floor, providing a variety of housing options, a new library facility including indoor meeting spaces available to the public, favorable lease options for a limited number of small business incubator spaces, and a programmable outdoor public space on the surface of the Library Lane parking deck totaling approximately 10,000 square feet; and
Whereas, Upon purchase of the air rights at Library Lane, AADL would be able to effectuate this vision without any involvement from the City aside from normal development and zoning approvals;
RESOLVED, That City Council authorizes the City Administrator to negotiate the sale of air rights at Library Lane to the Ann Arbor District Library should the proposed Charter amendments be approved by the voters in the August 5, 2025 special election; and
RESOLVED, That the City Administrator is authorized to take all appropriate actions to implement this resolution, including the development of all appropriate documents and agreements.
Sponsored by: Mayor Taylor