Bill Milliken: Ann Arbor lifestyle formula as good as San Francisco

INTRO: In the last U.S. census, two Michigan cities gained population. Grand Rapids and Ann Arbor. Ann Arbor has the lowest unemployment rate and perhaps the most expensive real estate. Some consider it a model for the rest of the state. Michigan Now’s Chris McCarus takes a tour with the son one of a former governor.

Bill Milliken Junior is the spitting image of his dad. He’s managed to stay out of politics and stay in real estate. He picked the right town. Ann Arbor. Milliken is leading investors on a bus tour. On State Street he points out a small building that will soon be rebuilt.

“They paid 4 million dollars for 15,000 square feet. That’s a home run. New Yawkers. New York investors. They’re New Yorkers, former University of Michigan students. They know the market. They like the market. They wrote the biggest check that we know of on a per square foot basis for redevelopment here.”

Milliken says real estate marketers are talking about third place. First place is where we live, second place is where we work and third place is where we go to have fun or socialize. For the three places to function right, they can’t be far apart. And the easier you can get there on foot or on bike, the better your economy is.

“Density is the prerequisite for the health of downtown and for transit corridors. There are some arterials going in and out of the city that are gonna be premised on density. People living nearby that they’ll walk to them and take advantage of them to go to work and go shopping. And there’s tax capture there. Yes we like density.”

Ever heard some one in Michigan say, “I haven’t been downtown in years.” You won’t hear that in Ann Arbor. Walk, bike or drive if you have to. See the houses on hill tops that look down over valleys to classical architecture that’s downtown or on campus.

“There are some wonderful examples of perfectly restored old homes that even people in San Francisco would have to look at with approval. We’re gonna drive through a couple of the neighborhoods and show you some of the things that people have done here….”

The tour bus drives into Ann Arbor’s old West side. An historic district commission requires new houses to look like the old ones. Milliken points to a strawberry red house. It’s brand new. But it complements the houses with fieldstone foundations, built before1900. The red tape is worth the hassle.

“I think that was in the $600,000 neighborhood. We’re seeing prices here at $300 square foot. That’s the kind of value and cache the neighborhood has. These are young professionals living here. This is the kind of neighborhood they’re looking for. Young professionals are very important to the economic health of a community.”

The think tank Michigan Future Inc. says there are 8,000 young professional households in Ann Arbor. But Madison Wisconsin, another college town, has 23,000. So Ann Arbor has some catching up to do. Bill Milliken says building railway infrastructure will help.

“The railroad crossing that we are at right now we hope will become a commuter station. When the Wally line connecting Livingston County to the north is put into place the idea is to give north-south commuters the chance to leave their car at home and commute by rail.”

The bus moves slowly in the congestion of Main Street. Sidewalk café’s make you want to get out and walk around. Not everyone wants to live in a subdivision out by the highway. For a couple hundred years, living above a store or restaurant wasn’t against the law. Here’s urban planning and real estate student Kevin Bush.

“If you look at main streets like this across Michigan a good indicator is what’s on the second and third floor. A lot of them are empty and that’s primarily due to zoning code and building code restrictions. So if you can get that framework changed you can add to the revitalization of these kinds of downtowns.”

John Langs of Magellan Properties says he has converted some second floors into apartments.

“We did in Chelsea and yes it’s very expensive. You pay twice as much and get half the rent for the upstairs. $35-$55 a foot.”

But progressive developers like Langs are willing to do it. They know in the long run this will densify their town and they’ll make money. The group parades over on foot to Zingerman’s Deli. It has 600 people on its payroll. They continue on to Kerry Town. It’s a mall made from old warehouses. There’s no place for cars, just people. 16 year old Slade Carter compares Kerry Town to a typical mall.

“This is a lot chiller and not as rushed or stressed. You can just talk and sit down. It’s a lot nicer.”

Milliken keeps the crowd on their feet. No one complains about the walking distance because everything’s close. The bricks, turrets and colors are interesting. Anyone thinking Bill Milliken’s republican pedigree would put him in Bloomfield Hills or East Grand Rapids is wrong. He welcomes the funkiness of Ann Arbor.

“Yes. We consider it part of the character. We like that.”

Most cities are dealing with mountains of foreclosures, vandalism even demolition. Eric Schertzing has these problems as head of the Ingham County Land Bank. Schertzing says Ann Arbor is different.

“It’s fascinating to see what they’re able to pull off because of their valuations…..I don’t think it’s a model. I would use like aspiration. You always want to be reaching. This is something that we can all want to reach for in our communities as we create place. Here they’ve spread it more around like peanut butter. I’m jealous.

The group saunters down a sidewalk to a condominium complex. The garages were dug into the side of a hill. Patio decks were built one story above the driveways. That’s where their front doors are. So instead of congregating with neighbors on the pavement they meet on wooden benches with flower pots. The group is impressed.

“Jacqueline was just saying, the sense of community. You’ll run into people. You’ll see your neighbors. You can congregate. If you don’t want to you can go home. It’s great.”

Ross Fisher is a builder and developer in Birmingham.

“This is something like I’ve not been exposed to. This is really good stuff. This is really an eye opener from a development perspective.”

Ann Arbor may as well be out of state. The economy is decent. Of course their top flight university helps. But they’re also saving old buildings, getting out of their cars and talking to their neighbors.

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