The most interesting item on the September 2, 2025 City Council agenda is a communication. The City Administrator has offered recommendations for the sale of City-owned property at the Kline lot and 415 W. Washington.
AC-2 (25-1561) 415 West Washington & Kline’s Lot July 28, 2025, City Council Work Session Supplemental Information
BACKGROUND: KLINE LOT
A previous Council designated the City-owned Kline lot for the potential development of affordable housing and directed public engagement and an evaluation of feasibility. Public engagement revealed strong community support for affordable housing. In 2021, Jennifer Hall of the Ann Arbor Housing Commission identified the property as ‘high priority’ and estimated that City development of the property could include up to 600 units of affordable housing.
In the fall of 2024, a series of Freedom of Information Act (FOIA) requests revealed that the City had engaged in months of negotiations for the sale of the City-owned Kline lot in order to develop a “Sports Illustrated Resort” complex. Exposure of the Sports Illustrated Resort deal led to significant public outcry among local attorneys who raised concerns about the financial terms, residents who found the plan exceedingly tacky, and community members who remembered the plan for affordable housing.
A majority of Council (seven) supported moving forward with a Sports Illustrated Resort, but the sale of City property requires eight votes for approval. In January 2025, that deal was aborted when a minority of Council (four) expressed opposition to the plan, telegraphing that a transaction would not be approved.
BACKGROUND: 415 W. WASHINGTON
In the summer of 2024, City Council considered a similar transaction for the City-owned property at 415 W. Washington. That west side property is fraught with more challenging conditions: its location on a flood plain prompted one former City staffer to declare it unsuitable for residential development. In 2023, it was rezoned for a Planned Unit Development (PUD) to allow its future development as a five story building with at least 15 units of affordable housing.
https://a2council.com/ann-arbor-city-council-april-17-2023/
In June 2024, a majority of Council approved a noncompetitive process for the sale of 415 W Washington: six months of exclusive negotiations with a company (4M) co-owned by Heidi Poscher.
https://a2council.com/ann-arbor-city-council-june-3-2024/
As happened with the Sports Illustrated Resort deal, public outcry scuppered the deal. Residents pointed to the fact that Poscher was a significant donor to Council campaigns and the Mayor. This year, the Michigan Daily reported that Heidi Poscher is also a convicted felon, who engaged in wire fraud (misappropriating investment accounts) and conspiracy to commit money laundering.
https://www.michigandaily.com/news/focal-point/a-local-developer-an-fbi-inquiry-and-money-in-ann-arbor-politics/
PUBLIC PROCESS TO PRIVATE PROCESS
Reacting to the failed Sports Illustrated Resort and 4M/Poscher deals, City Council directed a decidedly less transparent process for the sale of these City-owned properties: use of a private broker. In this way, the details and negotiation of proposals would not be public record and would not be accessible by FOIA request – all communication would be held by the broker. In February 2025, a private broker was hired for $700,000 in order to solicit and receive bids for the sale of two City properties: the Kline lot and 415 W. Washington.
https://a2council.com/ann-arbor-city-council-february-18-2025/
At a work session this summer, Council was presented with general descriptions of bids received (and deemed suitable) by the broker for the sale of the Kline lot and 415 W. Washington.
https://a2gov.legistar.com/MeetingDetail.aspx?ID=1318466&GUID=335642EA-B8C8-4924-8C83-2EF27A401CFB
“KEY INFORMATION”
This week’s agenda includes brief summaries of the bids chosen by the broker as well as the City Administrator’s recommendation for which proposal should be accepted.
AC-2 (25-1561) 415 West Washington & Kline’s Lot July 28, 2025, City Council Work Session Supplemental Information
Among the documents are questions from City Council members (see attachment 1 “July 28 Council Work Session“), one of which is especially interesting:
Question: In addition to the answers that Council posed on Monday, can you please share the entire proposals for the potential developers selected as finalists on both sites?
Response: With this transmission staff has provided the key information on each of the finalists. If for some reason you still are seeking additional information please reach out to the City Administrator.
This response reveals both nothing and everything. If the question had been answered, the full proposals (as requested by the Council Member) would become public record. As happened with the Sports Illustrated Resort deal, those proposals would be scrutinized by an educated public of local attorneys, environmental activists, housing experts, and other interested community members. Residents would almost certainly reach out to elected members of Council with concerns.
The intent to withhold details from the public was clear enough when City Council hired a private broker. However, this week’s non-response suggests something else: if full proposals can not even be shared with Council Members, then our elected representatives will not be scrutinizing details and substance, either. Apparently, City staff expect that recommendations will be approved by elected representatives based on general bullet-point summary, only.
This week’s agenda begs a few questions:
- What is the obligation of elected City leaders to responsibly manage City assets on behalf of the community?
- If it is legitimate to withhold details from the public, is it also legitimate to withhold details from elected representatives?
- How far can decisions be driven behind the curtain (or delegated) in order to avoid accountability to the public?
The sale of City Property requires eight votes, so at least eight members of Council will have to approve the proposals for the Kline lot and 415 W. Washington. It will be interesting to see if they are willing, with or without knowing the details of either.