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Council approves $1.2 million appropriation for Victor’s Way affordable housing acquisition
Summary
Council approved a grant and purchase agreement (CA 25) to support acquisition of a 114‑unit former hotel at 800 Victor’s Way for conversion to long‑term affordable housing using 501(c)(3) bond financing; total project costs were described as a bit under $20 million.
The council approved CA 25 on June 15 to authorize a grant agreement and related approvals enabling the Ann Arbor Housing Commission and Ann Arbor Housing Development Corporation to pursue acquisition of a 114‑unit former hotel at 800 Victor’s Way for long‑term affordable housing.
Staff said the acquisition—including soft costs and modest renovation—will total a bit under $20 million. The transaction uses a 501(c)(3) bond mechanism in which the housing commission serves as bond issuer and a nonprofit owner/operator will manage the property; the financing structure does not require the city to pledge its full faith and credit. Under IRS rules for this financing staff said the project must commit at least 40% of units at 60% of area median income (AMI) or 20% at 50% AMI; because of the low cost of financing staff expects to ensure all units are affordable at 80% AMI or below.
Staff said current tenants who hold valid leases at acquisition would be grandfathered until vacancy; due diligence on incomes and leases is ongoing. The council approved the purchase and the requested $1,200,000 appropriation with the required vote to meet the charter threshold.
