Title
Resolution to Approve an Agreement of Sale for a Portion of the So-called "Transformer Alley" to Bluestone Realty Advisors, LLC in an Amount Not Lower than $240,000.00 to be Deposited into the General Fund (8 Votes Required)
Memorandum
The City of Ann Arbor has been approached by parties interested in the development of the parcel currently containing the Galleria Shopping Center at 1214 S University Ave about our interest in selling a very small section (.036 acres) of the so-called Transformer Alley for its inclusion in a future redevelopment of the site. City staff investigated the consequences of such a sale and determined that the property is not of strategic importance to the city and its inclusion in a proposed residential development on the site would support new housing development in the city.
However, this portion of property contains stormwater infrastructure related to the Forest Avenue Parking Garage that the City owns on site. Therefore, the sales agreement has been structured as a sale of property to Bluestone Realty, LLC while reserving an easement for the City to access all underground infrastructure and preventing the development of any structure from ground level to 25 feet of elevation so the City has appropriate vertical clearance to perform maintenance of the underground infrastructure.
The City acquired an appraisal for the property which indicated that fair market value was $240,000.00. The purchaser agreed to a price not lower than this amount. The closing period has been set for any point between now and 24 months from now to allow Bluestone Realty, LLC the flexibility to negotiate and complete a development agreement and property transaction with a third party for the entire site. The price will escalate 0.75% every 90 days during the 24 month period to reflect anticipated increases in the market value of the property. This sale of City-owned property will only be completed if Bluestone Realty initiates a closing within this...
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