Council approves $700,000 brokerage contract for downtown parcels amid floodplain concerns for 415 West Washington

The Ann Arbor City Council on Feb. 18 approved a professional services agreement with CBRE for brokerage services to market the city-owned Cline lot and 415 West Washington, and appropriated $700,000 for the work (CA 15). The motion was moved by Council Member Malek and seconded by Council Member Adena and was approved by the council.

Scope and contract terms: City administration said it ran separate procurement processes for the two parcels and selected CBRE. The administration negotiated a flat-fee structure rather than a percentage-of-sale commission because percentage proposals could have yielded substantially higher fees depending on sale prices; the city anticipates paying roughly $350,000 at contract start and $700,000 total (half up front and the remainder per contract terms). City staff said they will manage the contract closely, maintain a regular cadence of updates involving the CFO and economic development director, and present top candidate offers to council rather than a single recommendation.

Public concerns about flood risk and local policy: Several public commenters asked the council to exclude 415 West Washington from the brokerage contract. Tom Stolberg urged the council not to "approve giving a broker $100,000 nonrefundable for an effort that has very low chance of success" and suggested waiting to consult the new economic director. He and Rita Mitchell emphasized that much of 415 West Washington is in the Allen Creek flood fringe and floodway; Mitchell cited the city’s hazard mitigation language and told the council the U.S. Department of Housing and Urban Development "prohibits spending federal money for residential uses in the flood plain" (commenter’s phrasing). Both urged using the site for stormwater mitigation and open space rather than housing.

Council response and next steps: Council members asked the administration for clarifications on process and cost-sharing. Administrator Dehoney said the city used an RFP process and that CBRE had the contacts to bring national buyers; he noted the city will share top two or three offers with council and that the University of Michigan is expected to share certain widening costs in a separate project. Council members asked that staff manage the contract actively to avoid long gaps in outreach and vetting.

Outcome: CA 15 passed. The mayor called the vote after discussion and the motion carried; the council then approved CA 8 (a separate purchasing authority increase for an unrelated construction contract) later in the meeting.

Ending: With CBRE engaged, city staff said they will return regular updates to council on interested parties and preliminary offers while also managing public concerns about floodplain policy and future uses for 415 West Washington.