Ann Arbor officials: Row of blighted houses along North Main Street must be demolished

Ann Arbor officials are pushing for the demolition of several dilapidated houses along Ann Arbor's North Main Street.

The six houses from 700 N. Main St. to 724 N. Main St., which are now considered dangerous buildings, are expected to go before the city’s Building Board of Appeals on Thursday. The site owners will have an opportunity to state their intention for the properties moving forward.

“One way or another, (those houses) will be demolished,” said Ralph Welton, the city’s chief building official. “I don’t think the owners have any intention of trying to save (the houses) for any reason.”

County records show the 1.19-acre property on North Main Street, which includes eight houses that have been targeted for a development for years, is owned by a limited partnership with two main entities: Ann Arbor for-profit developer Three Oaks Group and nonprofit Avalon Housing. The groups purchased the properties for about $2.5 million over the course of eight years.

But now the property is in a six-month redemption period after the lender, Great Lakes Capital Fund, foreclosed in November, said Carole McCabe of Avalon.

During a redemption period, a borrower may reclaim the title and possession of property by paying off the debt.

Until recently, Avalon and Three Oaks were planning to demolish the now-dilapidated structures and build an affordable housing apartment complex called Near North on the property. As the groups tried to line up financing for the project, the houses fell into a state of disrepair.

In September, the project was canceled entirely when new FEMA floodplain maps brought as much as 50 percent of the property into the floodplain, causing the developers to lose a significant portion of funding for Near North.

Now that the project is no longer moving forward, city officials have begun the formal process required before taking action to demolish six of the structures. The houses at 626 N. Main and 630 N. Main are not included in the dangerous building notice.

Notices posted on the six houses in November detailed the issues with the properties. Among the citations: neglect, vandalism, damaged foundation, roof damage, no windows, no doors, stripped siding, dilapidated porches, vacant more than four years, rear porch collapsing, roof severely compromised, disintegrating foundation, open to vermin infiltration, fire and water damage, and disintegrating block chimney.

Welton said the property owners will have the opportunity at Thursday’s meeting to make a case against demolition or describe their plans for the property before the city would move forward with demolition on its own. He said the process is complicated by the foreclosure and the complex ownership structure.

McCabe said at this point, Avalon is cooperating with the city in the process but does not intend to demolish the houses.

“We told the city that we’re not going to be able to get those houses down,” she said. “We weren’t able to get them down in the timeline the city wanted…we’re cooperating with (the city) however we can.”

She added: “We’re in a six-month redemption period before any other action takes place, but we’re still in place as the ownership entity.”

Welton said if the owners don’t intend to demolish or repair the houses, the city will proceed with demolition using money from its $250,000 blight fund that was established in February and then put a lien on the property for the demolition costs.

“The bottom line is, (the houses) will end up coming down, and whoever actually has ownership — whether it’s the money lenders or the various developers involved — will end up paying for the demolition.”

Council Member Sabra Briere, D-1st Ward, said if the board gives approval at Thursday’s meeting to demolish the houses with the blight fund, she expects demolition would happen sometime in the spring.

"In an ideal world, I wouldn't like to see those buildings come down, but we don't live in that world," Briere said.

"I'm told they're in such bad shape they could not, in an affordable manner, be rebuilt," she continued.

Related story: Near North project stalled on Ann Arbor’s North Main Street: What’s next?

Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.