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University Towers and the Landmark at South U and Forest, Ann Arbor, September, 2013

A Tale of Two Buildings

Old versus new at South U and Forest

by Greg Dobrin

posted 10/29/2013

At the fibrillating heart of hard-partying undergrad-ville rises University Towers, a well-worn apartment building that until a few years ago loomed unchallenged over its campus neighborhood.

"Did you know Madonna lived there once?" asks Dick Scheer.

Scheer is the proprietor of Village Corner, the party store that for more than four decades sat catercorner to U Towers, a spot Scheer claimed not too long after the nineteen-story behemoth was built. His Madonna fun fact is something of a neighborhood meme, the Ann Arbor pop cultural equivalent of "George Washington slept here."

Like the Michigan-born pop star, U Towers has seen better days, and like the Lady Gagas and Katy Perrys snapping at the Material Girl's stiletto heels, a newer, more luxurious student apartment building, the fourteen-story Landmark, now occupies Scheer's former location. It might be viewed as the Towers' glitzy nemesis: an ambitious understudy waiting for the long-of-tooth star to fracture an osteo-porous ankle.

Scheer chose not to wait out nearly two years of construction to reopen in the new building--instead, he sold his lease and moved Village Corner to Plymouth Road. "They would've gladly put us back in there," he says, "but the rent would've been high, and the delay would've been long."

So the Village's former corner is now occupied by a World of Beer franchise, a lively, if all-too-familiar-looking sports bar featuring the streetside seating that spills onto Ann Arbor sidewalks each summer like Paris on the Huron. A few doors down an antiseptic-looking 7-Eleven glows.

Madonna did, in fact, park her leg warmers in U Towers' apartment 10A (now 1001) during her brief tenure as a U-M dance major more than thirty years ago. Her stay is documented in Whit Hill's 2011 memoir, Not About Madonna. Hill was Madonna Ciccone's U Towers roommate, working alongside the future megastar at Miller's Ice Cream Parlor downstairs and dancing with her at the former Rubaiyat nightclub at First and Huron, Ann Arbor's gay dance club precursor to the Necto. Back then,

...continued below...


University Towers and Tower Plaza, its better-looking contemporary across campus, were the only high-rise apartments in town.

Lately, of course, student rentals have been bursting into Ann Arbor skies like magic beanstalks. Competition is everywhere these days, but it's the neighboring 606-bed Landmark which competes in overall massing, if not quite airspace dominance, with the 560-bed U Towers.

With its brick detailing and window bays, Landmark looks like four or five traditional downtown storefronts stacked atop one another. The 1965 Towers, a brash International-style monolith, makes no such pretense. With its once-modish outdoor swimming pool and soaring profile, was it considered a luxury building? "Not exactly," recalls Dick Scheer. "It was mostly just ... tall." Cynthia Shevel, whose Middle Earth gift shop has been a neighbor since the mid-1970s, says Maynard House was probably the more upscale address of the period.

But just as it did in the 1950s and '60s, when, along with the skyscraping U Towers and U Plaza, scores of nineteenth-century Ann Arbor dwellings were replaced by low-level apartment cubes, the vogue in student rentals has once again switched course.

Today's trend reached national attention last December, when the Wall Street Journal trumpeted a bold new age of "resort living" in student housing. Landmark is owned and managed by Texas-based American Campus Communities, the company hailed by the Journal as the nation's top campus developer. Its menu of Sandals-like attractions includes free tanning, yoga, Wi-Fi hot spots, a movie room, fitness center, sauna, hot tub, sun deck, fire pit, and barbecue grills--all mere amenities to sleek apartments with wet bars, sectional sofas, hardwood floors, granite countertops, and stainless steel appliances.

Previous (and apparently sorely deprived) generations might think such add-ons luxurious, but Gina Cowart, ACC's VP of investor relations and corporate marketing, calls them the new normal. "It's all market driven," she says. Landmark isn't marketed as "luxury," says Cowart, but rather as a "high-quality student housing community." Scholars wealthy enough to afford the price tag get all the creature comforts in an easy-walk-to-campus location

Along with Landmark, the wave comprises the ten-story, 343-bed Sterling 411 Lofts; its East Washington neighbor, the thirteen-story, 415-bed Varsity, and a pair of Zaragons--the original ten-story, 248-bed Zaragon Place on East U and the newer fourteen-story, 199-bed Zaragon West on William.

It's a deepening mainstream in which hoary, Suburban Campus Properties-owned U Towers must paddle hard to survive.

---

Madonna's former pad is starting with a multi-million-dollar redo of its street-level exterior. "We're removing all of the old awnings--all of the colorful awnings!" laughs property manager Dena Isley; they'll be replaced by small hanging signs. There will also be new banding and lighting. "It'll soften it," says Isley of the planned nips and tucks to the Towers' street-level facade. Chain eatery BurgerFi will soon occupy the currently vacant corner space.

While plans don't include a power washing of U Towers' graying sheet-pebble exterior or replacement of shabby, skyward-reaching windows, they do include a pool-area renovation this fall. Next spring will be the fading ground-floor lobby's turn.

What'll be redone on the lobby level? "Ev ... ry ... thing," says Isley, an eighteen-year Towers veteran. "All of the walls are coming down. There'll be a new receptionist area, new offices, new lounge, new workout area--all new furniture, all new workout equipment. Everything will be new." Then, next summer, all of the buildings' 240 upstairs apartments will receive new kitchens and baths--but will keep the same floor plans.

Floor plans weren't a problem on the building's second floor. Long rented as offices to the U-M, it was a blank slate as U Towers moved to recognize students' changing tastes and rental preferences. It reopened last fall as the "Second Floor," a nod to the shared-living-space, multi-bedroom floor plans offered by its newer neighbors.

With its own South U entrance, it now features ten apartments: six with three bedrooms and one bath, three with four bedrooms and two baths, and one two-bedroom, one-bath. That's well plumbed compared to the building's upper floors, which offer studios and one-to-three-bedroom apartments, none with more than one bathroom.

"We're old school in U Towers," says Isley, "but we're new school when it comes to the Second Floor." Not only are the apartments there practically brand new, they include amenities like flat screen TVs and kitchens with quartz countertops and stainless steel appliances. In another innovation copied from the new neighbors, second-floor tenants can sign an individual lease for a single bedroom in a multi-bedroom unit.

Upstairs, though, U Towers remains old school. While individual leases are available, so are traditional "joint and several" contracts, in which all the tenants share responsibility for the entire unit--and the entire rent. If cost is no object, though, roommates are optional. "We differ because if we rent a two-bedroom, you can take the whole thing by yourself, or you can have up to a total of four people in there," Isley says. "Whereas other places, if you rent a two-bedroom, there are two people that live there."

Unless you hog two bedrooms yourself, you'll pay less to live in U Towers. In mid-2013, rents on the higher floors started at $700 for a room in a three-bedroom apartment; a studio was roughly $1,200. On the all-new Second Floor rents ranged from $995 for a room in a four-bedroom apartment to $1,100 for a room in a two-bedroom.

That's the only place where rents approach Landmark's. In mid-2013 rents there ranged from about $900 for a room in a six-bedroom, four-bath apartment to about $1,700 for a studio. Landmark has a total of 337 bathrooms for its 606 bedrooms (a ratio ACC inexplicably calls "one-to-one"). Similarly, U Towers has 253 bathrooms for its 560 bedrooms.

Interestingly, Landmark did offer the option to share a bedroom for a lower price when it opened, but it's since been dropped for lack of demand--further evidence that demand is pushing, not chasing, the new buildings.

Both Landmark and U Towers provide a by-gender "roommate matching" system, the exception being, according to U Towers' leasing agent Doug Reed, when a mixed group chooses to rent together. Landmark doesn't allow smoking anywhere on its premises. U Towers allows smoking for "joint and several" (group) leases, but not "single liability" leaseholders and not in public areas.

Landmark provides parking for $180 per month in its underground lot, while U Towers offers a municipal parking pass for $160 per month for spaces allotted by the city at the nearby South Forest garage. Whereas U Towers has a communal laundry room, Landmark has full-size stackable washer/dryers in its apartments. Landmark also has what it calls a "Research Center," with Mac computers and printers.

U Towers had a computer room about fifteen years ago, but, says Isley, "today, you don't need a computer room." Nooks and living space in the forthcoming lobby redo will give tenants a place to go outside their apartments. And Isley feels competition from the newer buildings has helped, not hampered, U Towers' rental pace. "In my opinion, it's done nothing but improve our rentals," she says. "We've been able to rent up much quicker." Like Landmark, U Towers was sold out by the time the school year started in September.

Isley says she doesn't anticipate much of a rent hike even after the upcoming renovations are complete. Costs will "go up slightly more than the normal 3 percent, but not astronomically," she says. "We'll still be way under market rate compared to the new product." As for her competition, she predicts, prices will continue to spike. "In three or four years' time, the taxes are going to go up in those places, and they have a board that they have to talk to and meet their expectations ... Everybody's got to get paid over there." Indeed, the prices Landmark lists online for the 2014 school year are about 10 percent higher than its mid-2013 rates.

According to the city assessor's office, both Landmark's assessed and taxable values sat at just over $30 million in mid-2013, having paid $40,000 in 2012 winter taxes (its first tax payment upon opening) and about $1.5 million in summer 2013 taxes. U Towers has an assessed value of roughly $16 million, but since the building hasn't changed ownership since 1998, its taxable value is less than half that, at just over $6 million. The building's winter 2012 tax bill was almost $72,000, while its summer 2013 tax came in at just over $287,000.

Its lower costs allow U Towers to market itself as "the best overall value in Ann Arbor apartments," a bargain-skewed message compared to Landmark's "high-quality" spin. The Towers' website gives an enticing, if not altogether realistic, tour of the property, the most inviting feature on a hot summer day being its glistening swimming pool. "We don't have luxury apartments in U Towers, but nice apartments," says Isley, "and the price reflects that. If you want brand new, you're going to pay for brand new."

----

Most we spoke with saw both Landmark and U Towers prices as distinctly nosebleed, but according to ACC's Cowart, "What you'll find is that what people consider the high end is actually market rate."

It depends on the market. Alice Ehn, executive officer at the Washtenaw Area Apartment Association, refers to the new high-rise stock as "luxury apartments with a luxury price tag" which could, she says, increase Ann Arbor rental rates overall. "If they sustain at this level and they're fully rented, then clearly there's a demand for it, and it could push other rents in the area up."

But aren't those rents already going up? "Absolutely," says Realtor Martin Bouma, owner of the Bouma Group. "There's just not a lot for rent." According to rental data gathered from myapartmentmap.com, the September 2013 average Ann Arbor rent for a studio was $820 per month, the one-bedroom average was $1,019, the two-bedroom average was $1,294, and the three-bedroom average was $1,579.

Putting Landmark's $1,800 studios in further perspective, in mid-September, the U-M Housing Office survey showed the average rent for a one-bedroom apartment off-campus was $771 per month--yoga and tanning not included.

Despite its high rents, tenants we talked to gave Landmark a thumbs up. "It's convenient," says one young graduate student who asked to remain anonymous, "that's the best thing about it." He likes his apartment and says that living in the building is every bit as nice as its advertising promised. A poli sci undergrad with a summer Landmark sublet also had nothing but upbeat things to say about her room in a four-bedroom apartment.

Over at U Towers, a post-doctoral student from Moscow was nearing the end of his six-month sublease. The eighth-floor, two-bedroom apartment he's been sharing is "fine, but it's definitely rather aged," he says. "The kitchen is really small." He says he found his half of the apartment's $1,500 price tag expensive, but he likes the building's location and the pool. The young Muscovite says he was aware Madonna once lived in the building but joked, vis-a-vis its appearance, "probably not in my apartment."

A city historical placard affixed to the wall next to U Towers' Second Floor entrance adds perspective to the changes wrought by the new student rental climate: a view of a lost, mainly residential crossroads and a photo of the incongruous high-rise under construction. Steps away, U Towers' street-level renovation steers that narrative to one of refurbished vitality and good things to come.

As if suspended in midair across the raucous nighttime street, Landmark's gym shimmers with flat-screen TVs and tenants peddling stationary bikes, a living advertisement for an enviable lifestyle, while in and out of both buildings--buildings whose exteriors, at least, represent the fashion of their times--hurry tomorrow's lawyers, doctors, corporate CEOs ... and perhaps a future pop icon or two.    (end of article)

[Originally published in October, 2013.]

 

 
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