Political Donor to Mayor & His Council Allies Benefits From City Zoning Changes Around Briarwood

by P.D. Lesko

2/11/22: This article has been updated with comments from Council member Kathy Griswold (D-Ward 2).

Council member Kathy Griswold’s (D-Ward 2) resolution asked City staff for the answers to a few questions: Who owns the 69 parcels impacted by the City-initiated rezoning around Briarwood? How much is each parcel worth now, and how much will that assessed value increase as a result of the TC1 zoning (a new zone for transit corridors) that was on the agenda for the Feb. 7, 2022 City Council meeting? Interim City Administrator Milton Dohoney in a comment appended to the meeting agenda, alleged that the request was “unusual,” and that City staff would not provide the information. Public records City staff refused to produce before the vote show that Jeff Hauptman, owner of Oxford Property Management, LLC, is the single largest property owner in the newly rezoned TC1 zone. Since 2009, Hauptman has donated tens of thousands to Mayor Taylor and candidates whom Taylor has recruited to run and endorsed.

Council member Griswold told A2Indy, “The Mayor’s move here is a financial transaction to maximize profit. I stand by my resolution to release these records to the public. I continue to be concerned about foreign investment in our community.” Public records show groups of the parcels around Briarwood are owned by both out-of-state and foreign investors. Records also show parcel ownership hidden behind layers of LLCs. “This is upzoing outside our comprehensive land use plan that at least doubles the value of these properties,” said Griswold. Council member Griswold, who earned her MBA from the University of Michigan, added, “Out-of-state and foreign investors have no reason to care about creating affordable housing and jobs in Ann Arbor.”

In a July 2021 article about the sharp rise in institutional and foreign investment in the U.S. residential real estate market, Reuters reported that, “…Local landlords provide the bulk of rental properties and affordable homes.” 

Griswold went on to explain that if this [the proposed upzonig] were following the City’s comprehensive land use plan, individual property owners would ask for upzoning. “This would conform to our long-term land use plans.”

“Finally, I have serious concerns that the Mayor’s law firm—and the Mayor as a partner in Hooper Hathaway—may be benefitting financially from this proposed upzoning by representing these property owners locally,” said Griswold. “We need to remember that Taylor’s firm was paid for services in the recent Gelman Plume negotiations.”

Christopher Taylor is a partner in Hooper Hathaway, located in Ann Arbor. Partners in a law firm typically share in a firm’s annual profits. Nonetheless, Taylor has repeatedly claimed in public statements he did not profit from his firm’s work in the ongoing Gelman Plume negotiations. It has been estimated those negotiations generate around $90,000 per day in legal fees for the firms involved.

In response to the request that the owners of the parcels should be made public before the vote, Council member Travis Radina (D-Ward 3) posted a prepared statement to social media in which he claimed the release of the public records would amount to “discrimination.” Council member Linh Song (D-Ward 2) said during discussion about Griswold’s proposal that the information was public and that people should find it themselves. Song and Radina were asked how to find the company names of the parcel owners on the City’s website and, with that information, how to find out who owns each company. Neither responded.

The newspaper obtained a copy of the TC1 Letter to Post (below) sent to all of the parcel owners on Oct. 21, 2021 and signed by city Planning Manager Brett Lenart. That letter included the names of all of the companies that own the 69 individual parcels. With the name of the company, a visit to the State of Michigan Business Entity database revealed the names of each company’s resident agent. That required 69 individual searches.

Some searches were particularly complicated. For example in the City’s Oct. 21, 2021 letter, Parcel 20, 789 East Eisenhower Parkway, lists CIG Eisenhower, LLC as the owner. Look up CIG LLC in the Michigan Business Entity search and the resident agent name comes up as “CSC-LAWYERS INCORPORATING SERVICE (COMPANY)” with an address in East Lansing, Mich. A visit to the Ann Arbor Assessors database to look up the address and tax information for the 789 East Eisenhower Parkway parcel returned this information: CIG EISENHOWER, LLC, 7500 OLD GEORGETOWN ROAD STE 1400, Bethesda, MD 20814. Lookup 7500 OLD GEORGETOWN ROAD STE 1400 and the trail leads to Cambridge Information Group, Inc. (CIG), 888 7th Avenue, 17th Floor, New York, New York 10019 and the company Proquest, LLC with the resident agent’s name listed as Larisa Avner Trainer. This is from her Linkedin profile: “As CIG’s General Counsel and Senior Vice President, I am responsible for the legal aspects of our mergers and acquisition activity, in addition to our financing and investor relationships, tax planning and corporate compliance. I also manage the corporate property and casualty insurance for all of the CIG portfolio companies.”

As for local real estate owner Jeff Hauptman, research suggests the rezoning could increase the value of his over $130 million in holdings by as much as 50 percent. It’s quite the return on his investment in the form of political donations to local candidates, including the Mayor, who voted to set into motion the rezoning Hauptman’s properties. In 2020 Hauptman donated the maximum amount permitted by law directly to Taylor, Disch, Song, Radina, Eyer and Briggs for a total of $7,500. Hauptman made those donations shortly after April 2020, when he received a $1.2 million PPP loan. (His entire PPP loan was forgiven in Nov. of 2021.) In April 2020, he also contributed $1,000 to the Inspire Michigan PAC registered to Ann Arbor resident Ned Staebler. The PAC paid to send out campaign mailers in support of Taylor’s candidates. Since 2009, when Taylor was elected to City Council, public records show Hauptman has donated $12,000 to Christopher Taylor. This makes Hauptman one of the Mayor’s top campaign contributors, behind U-M Regent Mark Bernstein and his wife Rachel Bendit, who both have made multiple individual maximum donations to Taylor’s campaigns.

In December 2020, Wonwoo Lee, the Director of Asset Management for Oxford Companies, was nominated by the Mayor to a seat on the Ann Arbor Planning Commission.

The Michigan Daily inaccurately reported that Hauptman “owns most of the properties” that will be impacted by the proposed rezoning. Through multiple LLCs, Hauptman owns the majority of the 69 properties, but not most of them. Hauptman, through these LLCs, owns the following parcels. Unless otherwise indicated, the parcel is zoned for office use:

• Boardwalk Commerce Park Associates, LLC: Number of parcels: 1. Parcel number 23 bought in 2018 by 777 Associates, LLC for $29.5 million. Taxable value is listed as $0 in City of Ann Arbor records. Zoned light industrial.
• Burlington Property, LLC: Number of parcels: 3. Parcel number 4 bought in 2015 for $21.8 million. Taxable value is listed as $2.68 million; Parcel number 4 bought in 2015 for $21.8 million. Taxable value is listed as $5 million; Parcel number 6 bought in 2015 by for $21.8 million. Taxable value is listed as $5.6 million.
• 777 Associates, LLC: Number of parcels: 2. Parcel number 17 bought in 2018 for $29.5 million. Taxable value is listed as $1.35 million; Parcel number 21 bought in 2018 for $29.5 million. Taxable value is listed as $0.
• Concord Center Associates, LLC: Number of parcels: 1. Parcel number 9 bought in 2016 for $14.4 million. Taxable value is $6 million. Zoned PUD.
• Blackbird Ann Arbor, LLC: Number of parcels: 4. Parcel number 42 bought in 2015 for $8.5 million. Taxable value is $4.98 million; Parcel number 45 bought in 2015 for $2.5 million. Taxable value is $1.659 million; Parcel number 46 bought in 2015 for $100,000. Taxable value is $13,721; Parcel number 50 bought in 2015 for $3.4 million. Taxable value is $1.946 million.
• Bluebird Ann Arbor, LLC: Number of parcels: 2. Parcel number 44 bought in 2015 for $9 million. Taxable value is $4.35 million; Parcel number 47 bought in 2015 for $11 million. Taxable value is $5.6 million;

Other owners of multiple properties is the Briarwood surrounding area include the Regents of the University of Michigan (4 parcels), as well as out-of-state owners in New York, Florida and Massachusetts.

In July 2021, the City Planning Commission recommended the rezoning of the area around Briarwood Mall to TC1 The new TC1 zoning is being pitched as a way to encourage transit-oriented and mixed-use development near Briarwood. Mayor and Council members have said that TC1 zoning will increase public transit use, which could help achieve the city’s sustainability and affordability goals. However, recent research published by the non-partisan Brookings Institute in July 2021 reveals that rezoning without ties to inclusionary and affordable housing requirements worsens gentrification. Ann Arbor City Council’s rezoning of the 69 parcels around Briarwood was tied to no inclusionary or affordable housing requirements.

Ann Arbor City Council also neglected to build race equity into the rezoning resolution. The proposal from the Ann Arbor Planning Commission and approved by City staff to rezone the Briarwood parcels included no growth and equity analysis. In Seattle, comprehensive planning efforts include a focus Growth and Equity Analysis as part of their decision-making process for rezoning.

Jenna Davis of Columbia University conducted a study published by the non-partisan Brookings Institute. Davis says, “…Upzoning activity is positively and significantly associated with the odds of a census tract becoming whiter, suggesting that upzonings might accelerate, rather than temper, gentrification pressures in the short-term.”

Davis writes, “Upzonings are far from one shape and size. For example, the Seattle City Council recently approved the upzoning of 27 neighborhoods hubs throughout the city, requiring that developers building in upzoned areas include below market-rate units in their buildings or contribute fees to an affordable housing fund. Portland’s recent upzoning measures, which allow up to four units on all residential lots throughout the city, allow developers to build up to six units per lot if at least half of the units are reserved for low-income tenants.”

A study published in January 2019 in the journal Urban Affairs Review analyzed the impact of upzoning policies Chicago passed in 2013 and 2015 that allowed denser housing near transit stops. The study concluded that over a five-year timespan, upzoning didn’t increase housing supply, but it did increase land values. Cambridge, Massachusetts, is considering an “affordable housing overlay,” which means allowing upzoning only if the new units are 100 percent affordable.

Ann Arbor’s Mayor and the majority of Council members have repeatedly said that rezoning/upzoning is the answer to Ann Arbor’s affordable housing shortage. Experts who research the problem of housing affordability and gentrification disagree.

Christopher Herbert is the managing director of the Harvard Joint Center for Housing Studies. Herbert is skeptical about rezoning’s impact on affordability, since the housing market is structured to maximize profit. “A lot of cities are saying let’s open the spigots, we’ll build so much housing we’ll get to the point where we get vacancies,” Herbert says. “But If developers see vacancies rise they will stop building…It’s the nature of our capitalist system.”

New market-rate housing will never be affordable to low-income and extremely low-income renters, millions of whom earn $7,500 a year or less. “[Rezoning/upzoning] are strategies to affect the broad middle of the market, for the moderate-income household, but it’s not going to bring housing into the reach of the poorest households,” Herbert says. 

“In general, developers are going to seek the highest profit possible, that’s what they’re supposed to do,” Herbert says. “Now, we’re building a lot of high-end housing. Because the development process is constrained, developers are going to build at the highest point of the market they can.”

Carroll Fife is the director of the Oakland/San Francisco Alliance of Californians for Community Empowerment and a spokesperson for Moms 4 Housing. She takes issue with politicians who put emphasis on market-rate housing. She believes new housing must be targeted toward people who earn minimum wage. “We need housing for people who make less than $40 an hour.”

“Upzoning/rezoning is not enough,” says California YIMBY’s Brian Hanlon. “It’s not going to solve [the affordability crisis] for everyone and not on a timescale that will help everyone…We need a whole panoply of legislation.”

Jenny Schuetz, is a Brookings Institute expert on urban economics and housing policy. She says, “I would rather give local governments quantitative targets for how much housing they ought to produce. We can look at things like rate of population growth and job growth and get a sense of the places that really aren’t building enough housing to keep up with demand, give them a target, and then give them some financial carrots and sticks to keep them accountable.”

In 2015, the year after Christopher Taylor was elected mayor, Ann Arbor set a quantitative target of 2,800 new units of affordable housing by 2035. Public records show over the past seven years Ann Arbor has fallen behind on that target by almost 600 units.