The Michigan Daily - Friday, November 19, 1993 - 3

Left vacant while tempers raged between city officials and homeless-
rights activists, the Ann Arbor Inn may have finally found a niche

I,

By JAMES NASH
DAILY STAFF REPORTER
The Ann Arbor Inn is like a promising child
who never reached its potential. It was brought
up a centerpiece of the city's downtown, a gleam-
ing 11-story ambassador to visitors and a sprawl-
ing symbol of Ann Arbor's emerging economic
might.
The inn never was able to fulfill these great
expectations. It survived an uneven childhood
only to reach the brink of collapse during ado-
lescence. At 23 years of age, the inn was shut-
tered, left an orphan by its bankrupt parents.
The inn's next owners will have to break with
this dismal history to restore the towering struc-
ture at Huron and Washington streets to its
position as an anchor of Ann Arbor's downtown.
HOPE FOR THE HOMELESS
During the frigid weekends of November
1991, the inn was home to a different sort of
tenant. A group of homeless advocates brought
pillows, sleeping bags and a conviction to see the
inn converted into low-income housing. Four of
the activists were arrested for trespassing.
The incident was one of many twists in the
checkered history of the former hotel. The dem-
onstrations during the winter of 1991 provided a
glimmer of hope for Ann Arbor's low-income
citizens, for whom spiraling rents have often
placed housing out of reach.
Homeless advocates saw their struggle vin-
dicated, at least in part, with a vote by the Ann
Arbor City Council Monday night. Ann Arbor's
legislative body unanimously endorsed a plan to
convert the inn to 123 housing units for senior
citizens whose incomes are at or below 60 per-
cent of the median income for city residents.
The proposal by First Centrum Corp. of East
Lansing adopted Monday was the only one of
three proposals that designated all units for low-
income seniors. But not all homeless advocates
think-the plan goes far enough.
"The people who are hardest hit by the
housing crisis essentially slip through the cracks
as far as this proposal is designed," said Michael
Kline, a graduate student at the University and
member of the Homeless Action Committee
(HAC). "People just getting by at the poverty
level still would not be able to afford the rents
they're charging."
In setting rates for the units, First Centrum is
caught in a delicate balancing act: meeting the
needs of the poor without creating a "ghetto" of
poor people that would detract from the down-
town business climate.
"Low-income in this case is really somewhat
of a misnomer," said First Centrum Treasurer
Nicholas Faber, noting that a senior couple with
an annual income of $29,000 falls under that
category. "We expect that most of the residents
will have reasonably moderate incomes."
Monthly rents for most residents will be
$566 for a one-bedroom apartment and $647 for
two bedrooms. Ten percent of the units are for
poorer residents at rates of $472 and $539 for one
and two bedrooms, respectively.
OPEN, FOR BUSINESS
The Ann Arbor Inn sits at the heart of the
city's business district. It forms a vital link be-
tween the downtown and Kerrytown, a brick-
sidewalked shopping district.
"The Ann Arbor Inn has a major presence in
the downtown if for no other reason than its
height and bulk," said Ann Arbor Area Chamber
of Commerce President Woody Holman. "As
one of the major buildings in the downtown
area, it has a great deal of importance in the
downtown economy, which in turn affects the
image of the city as a whole.'
"In its present condition, there's no question
the Ann Arbor Inn is an eyesore."-
Some business representatives claim the First
Centrum proposal amounts to a cosmetic re-
touching of a structure in need of a complete
overhaul. Others, including some Chamber

members, question whether low-income hous-
ing even has a place downtown.
"First Centrum's proposal doesn't do any-
thing really significant for the building," said
Raymond Detter, chair of the Citizens Advisory
Committee for the Downtown Development
Authority (DDA). "But we think there are pos-
sibilities in their plan that we can work with.
(First Centrum officials) seem to show a willing-
ness to deal with the issues being brought up."
The leader of an Ann Arbor co-op that sub-
mitted a competing bid for the inn labeled First
Centrum's proposal a "short-term solution."
."In t*1. a nn a term *ihn ..nrnnno 1a. wmaynt


BE63M
The Allenal Hotel, on site
since the 1840s, is razed.
This demolition makes way for
building construction.
The current building of the
Ann Arbor Inn is first occupied
and operated as the Sheraton
Motor Inn.
" .
A series of renovation projects
is undertaken to improve the
physical conditions and the
economic vitality of the inn.
Falling occupancy and finance
problems saddle Inn owners.
Two banks threaten to
foreclose Inn. Owners file for
Chapter 11 bankruptcy
protection from creditors.
The Inn closes due to
delinquent taxes. Washtenaw
county takes over ownership.
OST-

result in confrontations with
police and arrests of
homeless activists.
Ann Arbor establishes an
advisory committee to study
different options for the Inn.
Ann Arbor City Council
advertises requests for Inn
proposals.
Three proposals for Inn
conversion are sent to a city
committee for review.

I

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I


The city committee that
reviewed the three proposals
for the Inn announces its
preference for First Centrum
proposal.

m

City Council votes to
commence negotiations with
First Centrum. It sets a 90-day
schedule for the negotiations.

MAtIR KOUKHAB1/Daily

Top photo:
A crumbling Ann Arbor Inn towers above passers-by on Huron
Street and Fourth Avenue.
Above:
The long-disputed hotel has been vacant for more than three
years. It may soon house 140 low-income senior citizens.

Homeless activists target the
Inn as a site for the city's
homeless. Sporadic protests
building," Faber said. "We plan to dress up some-
thing that looks pretty bad and make it appealing
to the downtown and good for business."
INN-SOLVENCY
Jan. 1, 1990 marked the demise of the Ann
Arbor Inn. The closing was foreshadowed by a
Chapter 11 bankruptcy claim in June 1989 by the
inn's owners, the Ann Arbor Inn Partners Ltd.
Banks twice had threatened to foreclose the
hotel, and the bankruptcy filing gave the Part-
ners a fleeting chance to get their finances in
order.
Owners of the 202-room hotel struggled to
attract visitors during the 1970s and '80s, but
profits proved elusive even with a major upgrade
in 1982-83.
Five months later Vyquest, Inc., which held
the mortgage on the hotel, presented the Part-
ners with an ultimatum: make good on $7 million
in accumulated interest or lose the inn.
As the inn fell into disuse, suggestions on its
future proliferated. Some advocated affordable
housing, others office space. The Washtenaw




Ann Arbor City Council appointed a committee
to deliberate the inn's future.
By the end of the 1992 the council had seized
the initiative to sell the boarded-up behemoth,
looking into the financial and legal baggage the
next owner would inherit. Last April the city set
aside $1,000 to pitch the inn in two Michigan
newspapers and a Detroit business journal.
The city offered one crucial selling point the
county could not - the buyer would be ab-
solved of all debts on the property. Four develop-
ers responded to the city's solicitation.
BATTLE OF THE BIDS
Ann Arbor's Request for Proposals (RFP)
Committee made only one demand of each devel-
opment proposal, that it balance residential and
commercial needs. A scheme to revive the inn as
a modern motel was thrown out for neglecting the
residential requirement. Three proposals-from
First Centrum, the Ann Arbor Mutual Housing
Association and Detroit-based Ballard & Associ-
ates - remained.
All had several appealing features, said Ann

ambitious of the three. Project costs were esti-
mated at almost $900,000 higher than the Kemnitz
plan.
But the Ballard plan was fiscal quicksand as far
as city officials were concerned. It relied heavily
on investment from the City of Ann Arbor Retire-
ment System and low-income housing tax write-
offs. RFP committee members singled out the
Ballard plan's dependence on retirement pension
investments as a major flaw.
THE DIE IS CAST
Representatives from the three developers were
on hand to lobby for their proposals at a council
work session Oct. 25. The RFP committee that
recommended First Centrum to the council had
endorsed the developer in a split vote, 4-2.
Councilmembers expressed reservations about
all three plans, but voted unanimously to begin
negotiating with First Centrum. The other two
proposals, said Councilmember Peter Nicolas (D-
4th Ward), posed risks that "in my mind I would
not put the city in a position to take."
Councilmember Ulrich Stoll (D-3rd Ward) cast