Thompson Block owner Stewart Beal provided a rendering of what the Thompson Block site will look like by the time construction is completed.
Courtesy Stewart Beal
The Ypsilanti Downtown Development Authority has decided to postpone considering Thompson Block owner Stewart Beal's applications for two grants that would go toward the rebuild of the 148-year-old Depot Town building, citing a need for more information regarding the funding.
"We definitely are in favor of the project, I just think the timing on the project is a little early, so what we're saying is we want to hold off until we can get a couple issues addressed," said DDA Director Tim Colbeck. "He has a schedule in place that's based upon funding."
Colbeck said one of the issues is the DDA would like to see proof and plans regarding how Beal will finance the $4 million renovation project. Colbeck said the DDA is also interested in receiving confirmation from the city that it will allow the project to move forward.
"We want to make sure the city will allow the project to move forward before we dedicate money to it," Colbeck said.
Beal told AnnArbor.com that he's in the process of seeking two types of funding, equity funding and debt financing.
The debt financing will come from a bank loan and the equity is expected to come from cash investments made by investors, Beal said.
"We have started to receive commitments from new investors and we are also in talks with one particular lender to do a bank loan for the project," Beal said. "We are at the very beginning of the project, but we plan to resolve both of those over the six months."
Beal said he's selling $10,000 shares to potential investors for the project. Beal said he plans to sell 174 and so far 27 have been sold.
"We anticipate selling the full 174 over the next six months," he said.
Beal said he's confident that he will be able to obtain full funding for the project.
Beal recently announced that the property was listed for lease. Beal plans to redevelop the property into 16 luxury lofts and about 14,000 square feet of commercial space.
The DDA's Economic Restructuring & Design Committee reviewed the grant applications at its May 22 meeting. Member Rois Savvides asked staff to request that Beal provide information on whether any funds were received from the property's insurance policy after the fire.
The committee recommended that the applications be placed on hold and reconsidered within a timeframe that is closer to the actual start of work and completion of the total project.
The committee’s final determination was to hold the application until a later date when the applicant could provide more detailed information on project funding and within a six month period of a confirmed start date for actual restoration and development work.
Beal submitted an application earlier this month for a facade improvement program grant. The maximum grant award cannot exceed $2,500.
The application stated that the total cost of the facade portion of the project will be $274,850. According to Beal's application, the estimated date of completion for the facade will by 120 days after project start date.
The total project timeline is 360 days from construction start.
The scope of the project in regards to the facade grant is as follows:
- Demolition and removal of the existing storefronts and entrances.
- Furnishing and installation of new wood / glass aluminum storefront system and entries, with all related structural work.
- Restoration / replacement as necessary of all existing historic windows.
- Masonry restoration, including tuck-pointing, cleaning and repair.
- Recreation and reinstallation of original cornice detail.
- Repairs to entry sidewalks, stairs and related areas in front of the façade.
- Supervision, permits, miscellaneous general condition and fees.
In the application, Beal states that due to the 2009 fire, his expected incremental costs of development have increase significantly over the original estimates. On Sept. 23, 2009, a fire gutted the entire building.
Beal wrote that the Thompson Block Partners LLC, the newly formed entity overseeing the development of the property, anticipates receiving a loan to fund the majority of the project. Beal wrote that the process to obtain the loan is "well underway."
"We now for example need all new windows when restoration of existing was originally contemplated," Beal wrote. "The grant requested here would assist in a small way to bring those costs more in line with our expectations across the building redevelopment as originally proposed. This assistance will launch the project sooner than might otherwise be possible in the current financing climate."
Beal also submitted a Building Rehabilitation grant application. Funding cannot exceed 50 percent of total project costs, or $30,000, whichever is less.
This rendering shows an example of the loft space that will be available in the Thompson Block building
Courtesy Stewart Beal
Colbeck said there's $30,000 available right now and if a project were deemed to be deserving of the full amount, that could happen.
The project scope listed on the application is as follows:
- Core, shell, and infrastructure improvement, with a specific emphasis on returning the facades on River and Cross St to their historic appearance.
- Apartment build-out on the building’s 2nd and 3rd floors.
- Renovation of the 1st floor to a “white box” level ready for build-out by others.
- All site improvements shown and/ or anticipated, including the construction of a parking lot on the adjacent E. Cross St site.
- Supervision, permits, miscellaneous general and fees.
Colbeck said the committee has not outlined a specific timeframe to reconsider the application, but said it's mainly dependent upon Beal receiving funding.
"It's entirely dependent upon when they’re ready to proceed," Colbeck said. "Potentially he could come back in a month and say we’re at 80 percent of the project financing... When he gave a presentation to our board, he talked about how they formed the(new) LLC. We know what he's doing to reach out and get funding, but right now it's not there.
"He's in the process of generating support for the project. The primary reason we were thinking is we have a limited amount of money in the pot. We don’t want to hold the money when there are other projects that can say we’re ready to go."
However, Colbeck said if the project comes into fruition, it would have a "tremendous effect" on Depot Town and the city.
"You're talking about such a big increase in residential and commercial space," Colbeck said. "Right now in Depot Town, there's only so much room to put businesses. It's just a big win for the district. The DDA feels that this is one of the most significant projects that could come online in the next year or so."
Beal said he understands why the DDA decided to postpone its decision on the grant applications and he plans to "circle back" with them.
"We're very happy for the DDA's support," Beal said.
Katrease Stafford covers Ypsilanti for AnnArbor.com.Reach her at katreasestafford@annarbor.com or 734-623-2548 and follow her on twitter.