Source:  Crain's Detroit Business

Date: September 10, 2007

Soft economy boosts interest in Ann Arbor's greenbelt project
By Daniel Duggan

When Ann Arbor's greenbelt plan was created in 2003 to protect farm land and open space, the booming local economy put the plan at odds with developers.

As developers tried to speculate on land where growth was headed, those trying to preserve land found themselves in bidding wars for prime parcels.

As the demand for land has waned, it's a different story today, said Laura Rubin, chair of the Greenbelt Advisory Commission, which makes recommendations of land purchases to the Ann Arbor City Council.

“In the last six months, with the downturn of the housing market, a lot more developers who bought land are coming to us, a lot more farmers who sold options that fell through are coming to us,” she said. “It's an increase in the amount of properties coming our way.”

With the soft market, she said, the commission hopes to find more opportunities to save land — but also save money.

“And frankly, we're the only ones with money to spend on land in the area,” Rubin said.

The voters of Ann Arbor approved the greenbelt program in 2003 as a way to preserve open space or farmland. Revenue is being generated for the plan in the form of a millage that began in 2004, expected to generate $84 million during its 30-year lifetime.

The city is purchasing development rights and land with a $20 million pool generated by bonds that have been sold against future millage income.

To date, development easements have been purchased on six properties. The plan so far has preserved 703 acres at a cost of $11.26 million. (See box, this page.)

While the easements deals have closed, no raw land purchases have been made.

The program has targeted sites in townships such as Ann Arbor, Webster and Superior and has been recently expanded to include a larger section of Scio, Webster, Pittsfield and Superior townships.

The strategy has been to create clusters of land on the perimeter of the area, said Albert Berriz, president and CEO of McKinley Inc., also a member of the Greenbelt Advisory Commission.

“Rather than shoot here and there, we've begun to create synergies of properties that aren't quite contiguous, but are close.”

The idea, Berriz said, isn't to buy land that might be developed in the future, but to protect the region long term.

“You can't head off development in good times or bad,” he said. “You're banking away, for the benefit of the community, a block of land that otherwise would be developed.”

Berriz has been on the commission from the beginning and satisfies the statutory requirement of having one developer on the board. From a developer standpoint, he said, the program has had the positive impact of promoting infill development in Ann Arbor.

“I went into it from a green perspective,” he said. “It's better to use our existing infrastructure and have a strong downtown before we invade the greenfields.”

But lack of demand for land won't always mean lower prices, said James Porth, a vice president with the Farmington-Hills based Thomas A. Duke Co. who specializes in Washtenaw County land sales.

“There's not a loss in value, there is a loss in the number of buyers,” he said.

“If (the greenbelt is) looking to be opportunistic in this environment, the issue is that some farmers would rather die than sell their land at a massive discount.”

Berriz said money hasn't been the only argument made to land-owners.

“We are a real-estate buyer in an environment where a lot of other buyers are no longer there,” he said. “But the people who sell us property don't just have an economic gain; what they're doing has a positive impact for the future of the community. It's a double bottom line.”

Daniel Duggan: (313) 446-0414, dduggan@crain.com



The Ann Arbor Greenbelt Project

Spent so far: $7.3 million by the city of Ann Arbor. The program buys open space and farmland. The city funding was combined with grants, donations and other local government contributions to generate a total of $11.26 million to acquire the six easement sites above.

Protected: 703 acres.

Note: This story has been adapted from material provided by Crain's Detroit Business.