'U' land purchases mean less tax money

A recent vote by the University Board of Regents to spend $2.5 million to purchase property near Michigan Stadium was described by administrators as beneficial to the campus.

But Ann Arbor officials said the University's gain translates into a loss of revenue for the city. Once acquired by the University, land goes under the public entity's tax-exempt status.

Tobi Hanna-Davies, a city council member, said the purchase of the small piece of land near the stadium, along with other parcels makes up a significant amount that becomes tax-exempt.

"It's yet another parcel of land added with all the others that makes it a concern," Hanna-Davies said.

The regents approved the purchase of property located north of the stadium on Main and Keech, as well as, some land extending to Hoover. The property includes two houses located at the addresses 118 and 126 E. Hoover and approximately 3 acres of vac

STEVE GERTZ/Daily A bulldozer stands in front of Michigan Stadium on Friday. The University recently purchased land near the stadium, making the property tax-exempt.

ant land at the northeast corner of Main and Keech, sometimes used for parking.

James Kosteva, director of community relations for the University, said the purchase was made in anticipation of future needs in business operations and the athletic department.

"In the short-run the land will be utilized to accommodate some parking for stadium visitors," Kosteva said.

Kosteva said there are not specific plans for the property, adding that the athletic department anticipates future spatial needs.

Kosteva said once a public entity acquires property, there is no longer property tax paid.

"City officials continue to express a concern when the University takes this kind of action," Kosteva said.

But Kosteva added that "the University is trying to be as sensitive as possible to this issue."

For example, he said officials are undergoing a review of University land holding and evaluating which ones can be returned to private owners. At the recent regents meeting, the board approved the sale of two single-family houses to private owners, and Kosteva described the transaction as market value returning to property tax rolls.

Ann Arbor Assessor Durk Ashley said the University occupies 1,627 acres of property in the city.

"Ten percent of the city is U of M property," Ashley said.

Ashley estimated the tax value of the land located at 126 E. Hoover at $56,800, 118 Hoover at $40,977 and the vacant three acres at $288,325.

University Associate Vice President and Treasurer Norman Herbert said the University has been interested in the land for at least three years. Herbert described the purchase as "a very strategic opportunity." He added that plans for the property are under study. Herbert said the area is in convenient property adjacent to the stadium and to athletic operations.

Last May, the University purchased three plots of land with houses on them, which are now used for parking.

Davis said the University allowed people to place bids on the houses to have them moved from the sites. One house located on Maiden Ln. was relocated to Pontiac Trail.

She added that there was not enough public notification to relocate the other two houses in time.

A trend at the University is to expand at the edge of campus, which is mostly the older part of the city, Hanna-Davies said.

"Our historic property represents the charm of the city," Hanna-Davies said. "However, I appreciate the University is putting property back in tax rolls."

Davis said old houses in the city can be moved to another part of Ann Arbor for affordable housing if non-profit organizations can receive the tax credit in time to move the houses.

"I am hoping and trusting the University will do what they did so well on Wall St. and Maiden Ln. - to put the property up for bid with a long enough timeline to enable someone to relocate the house," she said.

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