Title
Resolution to Approve the Purchase of Real Property Located at 124 Felch for $373,400.00 Plus Costs Not to Exceed $20,000.00 ($393,400.00) (8 Votes Required)
Memorandum
Below for your review and action is a resolution to approve the purchase of the property located at 124 Felch Street, Ann Arbor, Tax Parcel 09-09-20-409-014 in fee title for $373,400.00 from the Seller, WIC 600 DE LLC (Wickfield Properties) on the terms set forth in the proposed Purchase and Sale Agreement (see attached).
The property at 124 Felch contains a residential structure constructed in 1901 which has been used as a rental property in the past. The property has a rental certificate but is not currently occupied.
The property is located in the Allen Creek floodway. Current State and City standards prohibit new or substantially improved residential structures in the floodway. This means if a current residential structure is damaged or is otherwise in need of substantial repairs or renovations over a certain threshold, it may trigger a requirement to meet current floodplain management standards, which would then mean the property could no longer be used for residential purposes.
The City’s FEMA-approved 2022 Hazard Mitigation Plan recommends the voluntary removal of structures from the floodway (Mitigation Action #33). The City previously tried to purchase this property in 2024 with the intent of demolishing the structure but was unable to come to an agreement on price with the property owner.
The City’s purchase of this property would eliminate another buyer from purchasing it and perpetuating the residential use of the building within the floodway.
If acquired, the City would seek to demolish the structure, foundation, and other impervious surfaces on the site to remove this obstruction from the floodway.
This property is also adjacent to the City-owned property at 721 N. Main Street, and if acquired, it presents additional opportunities regarding plans for the future of 721 N. Main.
In compliance with the requirements of Code Section 1:321, the City obtained an appraisal of the property in April 2024.
Budget/Fiscal Impact: Funds for this property purchase are available in the approved Stormwater Fund budget. Funding for the purchase will include the purchase price plus due diligence and closing costs for a total amount not to exceed $393,400.00.
Staff
Prepared by: Jennifer Lawson, Water Quality Manager
Skye Stewart, Chief of Staff
Reviewed by: Jordan Roberts, Public Services Area Administrator
Christopher Frost, Senior Assistant City Attorney
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, The City of Ann Arbor completed a Hazard Mitigation Plan in November 2022 that recommends voluntary acquisition of properties at risk of flooding as opportunities arise with a priority on properties that are in the floodway;
Whereas, This site is adjacent to the City-owned 721 N. Main Street site where the DDA is currently seeking proposals for design engineering services for a future stormwater park and trail connections;
Whereas, In compliance with Code Section 1:321, the City obtained an appraisal of the parcel as part of a previous FEMA grant-funded effort to acquire the property;
Whereas, City staff and the property owner have engaged in negotiations for the purchase and sale of the property and have agreed on a purchase price of $373,400.00, which is the True Cash Value (i.e. twice the parcel’s State Equalized Value) as determined by the City Assessor for the tax year 2026;
Whereas, Purchasing this property and removing the residential building from the Allen Creek floodway will advance the City’s goals of reducing potential flood hazards and losses, minimizing potential damage to public and private property, and protecting public health and safety;
Whereas, Based on the benefits it would provide, City staff recommend purchase of the property;
Whereas, There are sufficient funds in the Stormwater Fund to cover the cost of this property purchase plus the estimated due diligence and closing costs;
RESOLVED, That City Council approves purchase of the real property located at 124 Felch Street, Ann Arbor, Michigan (Tax Parcel 09-09-20-409-014) in fee title for $373,400.00 from the Seller, WIC 600 DE LLC, plus due diligence and closing costs not to exceed $20,000.00
RESOLVED, That City Council approves the attached Purchase and Sale Agreement for 124 Felch Street;
RESOLVED, That the Mayor and City Clerk are authorized and directed to execute the Purchase and Sale Agreement after approval by the City Administrator and City Attorney; and
RESOLVED, That the City Administrator is authorized to take all appropriate actions to implement this resolution and the Purchase and Sale Agreement, including the determination of satisfactory due diligence, exercise of all determinations and authority delegated to the City under any agreement authorized by this resolution, and the execution and management of ancillary or related documents, instruments, and agreements after approval by the City Attorney.