Peninsular Place has potential new owner (UPDATE1)

January 23, 2007 by  
Filed under News

(January 23, 2007) The controversial Peninsular Place apartments may have found a new buyer. Officials at Hendricks & Partners, the exclusive sales agent, have confirmed that the property is under a sales contract with a new buyer and according to their website is currently in escrow.

Peninsular Place is across the street on the north side of EMU on the corner of North Huron River Drive and Leforge Road. The property has been on the market since May of 2006 and is listed for $24.7 million. Edwards Communities of Columbus, Ohio, the current owners, listed the property with Hendricks & Partners. Hendricks bills itself as the nations largest apartment sales firm.

Edwards has bundled Peninsular Place with two other Edwards properties, Newton Crossing in Lexington, KY and Olde Towne University Square in Toledo, OH. The package price for all three properties is $112.3 million. All three properties are in escrow. However, it is unknown if it is the same buyer.

In the sales flyer produced by Hendricks, they glowingly describes all three complexes as “Property sites (which) are irreplaceable in high barrier to entry, infill locations.”

Hendricks indicates that Peninsular Place has a net positive cash flow of $483,000 a year. This is after paying all expenses and debt service.

Even while Peninsular Place was on the market, Rick Kirk of Edwards Communities was asking the City for more tax breaks. Edwards has already received about $1.5 million in property tax credits from the City when they first began development in 2002. Edwards currently pays about $17,000 a year in property taxes for the 184 unit apartment building.

Watch Video of the Ypsilanti City Council, January 16, 2007

Kirk was before Ypsilanti City Council just a week ago on January 16, 2007 asking for a new property tax break of $490,000 from the city for Peninsular Place. It is expected that Council will vote on this new tax break at their February 6, 2007 meeting.

This is not the first time Kirk and Edwards Communities have appeared before city council asking for additional tax breaks, despite having already built Peninsular Place.

In March 2006, Kirk, along with two other associates and armed with three binders almost two feet in height, came to Council to ask for $1 million in new tax breaks. Kirk probably couldn’t have picked a worse night to come before council to ask for money. This was the same night Council was considering the resolution to cut funding for the AATA bus service. So with a packed house at the Senior Center, and residents unhappy with the $180,000 cut in bus service, Council wisely took no action on the request for $1 million more in tax breaks for Peninsular Place. A year later Kirk is now back with a revised number, this time asking for $490,000 in property tax breaks.

Many have wondered, given the continuing problems with the City’s struggling Water Street Project, as well as Visteon/ACH having announced they are pulling out of Ypsilanti, the recent announcement that Pfizer is leaving the area with 2,100 layoffs expected, and the ongoing threat of a City Income Tax, can the City of Ypsilanti really afford to give away another $490,000 in tax breaks for an apartment complex that is already finished?

This $490,000 tax break would go to an Ohio company who will likely not reinvest the money in Ypsilanti and in fact is actively trying to sell the only property they own in Michigan to a new owner. This same company in their sales brochure, claims they are generating a $483,000 per year positive cash flow on the Peninsular Place yet they want more tax breaks from the City of Ypsilanti

At the same time, in the City’s three year solvency plan, the City of Ypsilanti is planning to lay off three firefighters and two police service officers which will increase the load on already strapped public safety departments. It is hard to see how this new tax break will benefit the residents and taxpayers of Ypsilanti.

Additional Links
Peninsular Place Video

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