Developer of proposed South University high-rise loses fight at Ann Arbor Zoning Board of Appeals

This story has been updated with comment from the South University Area Association.

The Ann Arbor Zoning Board of Appeals voted 6-0 Wednesday night to reject a developer's request for a zoning variance to construct a 145-foot-tall building at 1320 S. University Ave.

Property owner Phil Sotiroff has been fighting unsuccessfully to be able to build a $50 million mixed-use project called the "Gateway" next to the new Landmark student high-rise.

The Gateway property, where a three-story, 36-unit student apartment building stands now, is located in the city's D2 zoning district, which has a height limit of 60 feet.

Sotiroff, who owns Ann Arbor's Prime Student Housing, requested the property be rezoned from D2 to D1 earlier this year, but he was denied by the city's Planning Commission and the City Council, and so he turned to the ZBA for help. The D1 zoning would allow a building up to 150 feet tall.

No official site plans have been submitted to the city of Ann Arbor, but the development team has suggested the Gateway could house as many as 500 tenants. Proposed amenities include an exercise studio, community room, entertainment center, ground-floor retail, outdoor cafe and parking that would be included below, at and above grade at the rear of the building.

Hoping to move forward with that project, Sotiroff's company, 1320 South University Apartments LLC, asked the ZBA for three variances from the city's zoning regulations Wednesday night.

In addition to the height variance, Sotiroff wanted approval for a side yard setback of 15 feet, a deviation from the required 40 feet. He also wanted a variance to permit a variable rear setback ranging from 6 to 37.5 feet, another deviation from the required 40 feet.

Members of the ZBA said they couldn't justify giving the developer approval to so significantly deviate from the zoning regulations and construct a building more than double the height allowed. They said that appeared to be more of a rezoning request than a variance or hardship relief.

Land use planner David Birchler and attorney Susan Friedlaender appeared before the ZBA on behalf of the developer.

Friedlaender said the project has support from the South University Area Association. She also turned in petitions signed by 1,800-plus students and other residents in favor of the project.

Maggie Ladd, executive director of the South University Area Association, said on Thursday the association actually isn't supporting the Gateway project, nor is it opposing it. Rather, she said, she communicated in a letter to the developer that her association is supportive of new development in the area and wants to see the 1320 S. University site developed to its full potential.

"We support development in the area and we support development of that site, but we have seen no plans so we can't come out in support of the project," Ladd said.

She said the association was disappointed to see the property downzoned to D2, but it has accepted that now and considers the zoning an issue between the developer and the city.

After the ZBA's denial, Friedlaender said she's not sure what the next steps are for the development team or whether they might pursue litigation in court.

"We haven't made any decision," she said, adding she doesn't believe there's any reasonable avenue for relief from the city at this point. "I think it would be pretty much fruitless."

The property in question sits on South University just west of Washtenaw Avenue. It was zoned R4C (multiple-family dwelling) when the building that stands there now was constructed in 1965.

It was rezoned to C2A (central business district) in 2006. Three years later, as a result of the city's A2D2 project, the site was rezoned to D2 — or what's considered a "step down" zoning district that acts as a buffer between the more dense D1 zoning and nearby neighborhoods.

Sotiroff has argued the D2 zoning regulations, in particular the 60-foot height limit and 40-foot side and rear setbacks, make it difficult to redevelop the property.

"This property has been relegated to the status of a buffer property," Friedlaender said. "Under the law, that's really only appropriate when it can have some effect."

Friedlaender said she's not sure who or what the buffer requirements are protecting.

"The Mud Bowl?" she asked, referring to the adjacent area at the Sigma Alpha Epsilon property at the corner of Washtenaw and South University that has been turned into a mud pit to host annual football games between rival fraternities on homecoming weekends going back decades.

"We did care about protecting the house that's directly south of this parcel," she added. "Here we wanted to even give more than a 40-foot setback."

As for the height, Friedlaender argued taller is better.

"What many urban theorists say is that when you restrict building height you encourage sprawl, you unreasonably increase rents, you impair affordable housing, you impair municipal revenues and you have a greater, more negative impact on the transportation system," she said. "So there is a benefit to having taller, slimmer buildings that take up less of a footprint."

Tony Pinnell, who lives in a neighborhood south of the proposed development, was one of a handful of residents who expressed strong opposition to the project Wednesday night.

He said the owners of 1320 S. University are sitting on a piece of prime real estate, situated on a bus route on a successful commercial street adjacent to the University of Michigan.

"This site is a dream come true already," he said, calling it "ludicrous" for the developer to argue the D2 zoning restrictions would prohibit redevelopment.

Tina Bassett of Bassett & Bassett Inc., a spokesperson for the project, said the 1320 S. University site is unique because of unbuildable zones. With the required yard setbacks and underground utility setbacks, she said, her client loses about 15,000 square feet of buildable land.

To put that into perspective, she said, that equals about the size of six lots on East University, Willard and Church streets in the D1 zone in the South University area.

Bassett also pointed out the Landmark building next door is 172 feet tall and the University Towers across the street on South Forest is 18 stories high.

Birchler said the 40-foot setback requirement from the east lot line renders more than a third of the South University frontage unusable.

"These practical difficulties are exceptional and peculiar," he said.

Ann Arbor resident Chris Crockett told the ZBA she worked on the city's A2D2 zoning plan and was on the committee that helped draw up design guidelines for new construction.

"This was a deliberate decision on the part of planners and all of the participants of the neighborhood to have this as D2 zoning," she said. "There was never any question about it."

She said the issue was discussed endlessly and it was decided that the area in question would serve as a buffer between the D1 and R4C and R2B residentially zoned areas.

Friedlaender said Crockett's version of events is inaccurate.

"During the entire downtown development process, the property was always recommended for D1 zoning," Friedlaender said.

She said it was only when the A2D2 changes went to the City Council in April 2009 that 11 parcels in the South University area, including 1320 S. University, were recommended for D2 zoning. From there, she said, it went back to planning and the Planning Commission worked out a compromise where only 1320 S. University and another parcel would be zoned D2 in that area.

Kevin McKay appeared as a representative of the neighboring Sigma Alpha Epsilon fraternity, which was expelled from campus after hazing allegations last year. He told the ZBA the fraternity was against the variance request and wanted the D2 restrictions to remain in place.

Ann Arbor resident Ethel Potts, a former city planning commissioner, guessed the reason for the developer's request was to achieve a higher financial return by having a bigger building.

"The petitioner is presently enjoying a reasonable use of his land," she added. "In fact, he could even expand the building somewhat under the D2 zoning, so he could even have more building if he wanted and still meet the zoning requirements."

Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's email newsletters.