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Mayor: Artspace to Buy City Hall Building for $1.65 Million

O'Reilly said during State of City address that both sides agreed to honor appraiser's price; sale to be finalized in coming months.

Dearborn Mayor Jack O'Reilly made a surprising announcement during his State of the City address Wednesday night: the proposed sale price of the current Dearborn City Hall.

It's expected that arts development nonprofit Artspace—which has committed to turning the city hall building at 13615 Michigan Ave. into live-work space for artists—will pay $1.65 million for the facility.

"That's the price established by an independent appraiser," O'Reilly said in prepared remarks before local officials and community members Wednesday.

Though the sale of the building to Artspace has been discussed for nearly a year, the city had not previously released an estimated sale price.

"We both agreed on the appraiser and what the appraiser said is what the price would be," O'Reilly said after his speech in an interview with Patch. "It's about what we're keeping and what we're selling."

Artspace will buy the main City Hall building and the West Annex in as-is condition. The city estimates that over the next few years, the complex will require $8-$9 million in investments such as structural repairs and equipment replacement.

The historic facade of the building and many interior structures will be kept intact.

O'Reilly added that according to Artspace, they plan to invest $17 million in renovating the property—including turning most of it into 50 rental living units for artists.

Though Artspace has live-work artist facilities in 30 other locations across the country, Dearborn's would be the first of its kind in Michigan.

The city, O'Reilly said, would still own City Hall Park, which will likely be maintained by the East Dearborn Downtown Development Authority in the future.

O'Reilly estimates that the city will be moving into its new municipal offices—located at 16901 Michigan Ave. just west of the Henry Ford Centennial Library—in early 2014. Currently, the city has bids out for the build-out process.

That building, a former ADP office, was purchased in March 2012 for $3.2 million.

As for the sale of the old building, the city hopes to have a finalized purchase agreement within the next few months. Artspace needs that agreement to be able to apply for the largest chunk of federal grant money to fund the project.

The target for that federal grant application, according to Dearborn Community Fund Director EmmaJean Woodyard, is August of this year.

"It's a long, slow process," she said. "But they're moving forward. You don't see a lot happening, but there is a lot going on."

Woodyard shared that Artspace representatives have been to Dearborn multiple times over the past six months to work on the project, and will likely be coming more often as the deal with the city comes closer to fruition.

As for having his office turned into an artist's apartment?

"It's really cool," O'Reilly said.

"I've got a lot of emotions about city hall," he added, "but I'm excited about Artspace."

Dearborn Taxpayer February 28, 2013 at 11:20 AM
Sounds like another bad deal for taxpayers. The city purchases a new building for $3.2 million plus likely millions more for "build out" and will sell its current builiding for $1.65 million to a non-profit who won't pay a dime in property taxes to the city and will use a multi-million dollar "federal grant" from taxpayers to upgrade the facility to building codes that current taxpayers have to pay permit fees to the city to inspect and approve or face stiff fines. Another example of government using taxpayer money and handing it over to others. No wonder government at every level is going broke or facing huge debt and an annual budget crisis that requires us to pay more! Check your city tax payments - you are paying more in total dollars to the city of Dearborn in property taxes than you have ever paid in the history of the city. But are you getting the same level or improved city services? I think not. That is a sad State of our City...
Charlie Terry February 28, 2013 at 12:36 PM
Here come the Corktown hipsters - those artsy people. Maybe a Slow`s BBQ isn`t too far behind, eh?
Seymour Poon February 28, 2013 at 02:11 PM
Reading this recap makes me weep for the naiveté that has become pervasive within City leadership. This misplaced belief in alchemy for landmark properties like City Hall and the former Hyatt are top candidates for sad chapters in the Dearborn story 10 years from now. Hopefully, Dearborn will not have to repeat the story arc captured in Detroit Ruins http://www.marchandmeffre.com/detroit/.
Joseph Bidot February 28, 2013 at 03:48 PM
Typical business management, by this illustrious management team, led by O'Connor and O'Reilley. This thinking has got to stop. Tom Tafalski the time has come to step forward and run against these neophytes.
Seymour Poon February 28, 2013 at 04:04 PM
Why can't Dearborn pivot to attract businesses to the community? If Artspace Projects can cobble together money from guilt ridden liberals to provide low income housing to starving artists, why can't Dearborn go after business leaders to stake out a new direction like San Leandro (CA) http://sanleandro.patch.com/articles/fcc-chairman-to-visit-san-leandro-tout-its-fiber-optic-loop? San Leandro was not content as a "poor relation" to richer Silicon Valley neighbors, so the community reached deep to offer "local businesses speeds up to 10 gigabits per second, or 2,000 times faster than the average U.S. internet connection." All variety of businesses could benefit from blinding connectivity speeds as Information Technology ("IT") migrates to the cloud. Think of medical technology where staples like X-rays take a long time to fully transmit. Houston is poised to overtake Chicago as the second largest city in the US - not for energy, but for its Texas Medical Center http://en.wikipedia.org/wiki/Texas_Medical_Center - the largest in the world!
Marci March 01, 2013 at 12:26 AM
I really hope O'Reilly reads the patch comments. As a taxpayer the numbers simply do not add up. If I sell a house for $1.6million in order to buy another horse for $3.2 m, it simply does not add up. And I am even more curious how a non profit can get grants for $8M for purchase and renovation, while parks are being shut down and our school systems are struggling! Wow!
Lee Jacobsen March 01, 2013 at 03:12 AM
Marci, my take on the non profit getting grants is that they are getting money to help struggling start up businesses survive, while at the same time saving a historic building. That is Federal Obama money, the parks and schools are funded by our city taxes. Both taxes come out of our pocket. The old City Hall was assessed by a private independent firm, it is worth 1.6 million. It is run down and is a small house. The new city hall house is much larger. What was the new city hall assessed at before we bought it? We need a modern building to offer residents better services. If you have ever appealed your property taxes, applied for building permits, etc at the old city hall, good luck trying to find any space to spread out your paperwork. Seymour's idea of high tech info transmission is a good one. High tech jobs pay good, would fill up the smaller shop locations, and may attract an Apple store or the like. Tech folk may add more on this subject, I am lucky to turn on my Iphone. Dearborn Taxpayer is right. Our city expenses with respect to perks and benefits to the employees are out of control . Time to restructure pensions, ie phase them out and adopt 401 plans where the risk and investment is controlled by employees. They need to have some skin in the game. Are the massive longevity bonuses to many city employees viable in this economy? Give them another week of vacation instead. The tax dollars saved can go toward parks, libraries, etc.
Marium Wilke March 01, 2013 at 03:38 AM
We are really changing the landscape of this city...We are taking away alot of the character if this old and proud city...Soon to be a city with not much to remember it by...So sad..Where loosing are sparkle....What's next..I am afraid to find out.. sparkle...W
Seymour Poon March 01, 2013 at 03:50 AM
Artspace Projects are funded by the usual liberal organizations http://www.artspace.org/about/funders. Artspace fundraisers will find the money to convert the City Hall as described here: http://www.artspace.org/our-places/city-hall-artist-lofts. And why not, this is highway (no pun intended) robbery. Excerpt: In partnership with EDDDA and the City of Dearborn, Artspace is now in the planning stages of a mixed-use arts campus that will transform the 1922 Georgian-Revival style Dearborn City Hall into 40-plus affordable live/work spaces for artists and non-residential space for artist studios, arts organizations and creative businesses. Estimated Project Cost is $13.5 million. THE REAL QUESTION IS: How an entire city block and historical structure in a prime commercial location can be purchased for only $1.65 million? If this land grab is any measure, our residences should all be reassessed to no more than $10,000 to keep a sense of proportion.
Marianne Burrows March 01, 2013 at 06:23 PM
Ahhh. Business doesn't create culture. Look at the Grand Rapids model folks. When they started doing Art Prize in their city, it was a huge economy boost all the way around. It gave people a sense of pride. BTW the "Corktown hipsters" you so chide turned the whole neighborhood around and made a walkable little stretch on Michigan avenue as well as strengthened community ties with older generations. You should hope that Dearborn is as fortunate.
stephen william schudlich March 01, 2013 at 06:32 PM
absolutely right! art is bad. vision like that of phil cooley (developer behind slows, slows to go, ponyride, etc. and huge advocate, supporter and driving force behind a creative cultural resurgence in detroit) is also very bad. give me a break folks. this stream of comments is insulting. and hipster bashing is cliche at best.
Seymour Poon March 01, 2013 at 06:55 PM
Economics 101: Businesses create jobs that enable the gainfully employed and their family members to partake of the arts as well as paying the taxes that fund local government. FYI: The transformative effect of Artspace in Chicago's Garfield Park neighborhood http://www.artspace.org/our-places/switching-station-artist-lofts has been imperceptible to the human eye since coming on stream in 2003.
Seymour Poon March 01, 2013 at 07:07 PM
Here's what $1.45 million gets you for commercial property in Ann Arbor: http://www.annarbor.com/business-review/new-owner-puts-former-damons-grill-building-up-for-sale/ and soon to be listed for sale at $1.9 million. It's a far cry from an architecturally significant building.
Seymour Poon March 01, 2013 at 10:06 PM
Stephen - In your role as the Director of Exhibitions at the U of M School of Art & Design, you couldn't possibly have a pecuniary interest in this low cost housing development masquerading as a cultural addition to the community - could you?
Charlie Terry March 02, 2013 at 01:00 AM
Well, I suppose I`ll concede to you. Those artsy people, you know, the ones who don`t shave or shower for a week or don`t comb their hair will invade Dearborn and perhaps paint what will be then be the old City Hall a host of different colors much like the business fronts alongside Michigan Avenue Corktown in Detroit. That is total trash over there - it is not art nor is it being creative.
Bob March 03, 2013 at 09:51 PM
Is there any word on when the schools will announce their final decision on whether or not they will be moving their offices into the new city hall? An article on Patch back in December 2012 stated that the school district will "revisit the issue in the future". Now that things are moving forward is there any time frame as to when the schools will announce their final decision on this matter once and for all? Are they actually looking into it now? Also, if the schools are not moving into the new city hall, has the mayor mentioned any type of back up plan for all the empty space they will have?
City of Dearborn (Editor) March 04, 2013 at 02:19 AM
That's a good question, Bob - I'll check in with the schools and see where they stand. O'Reilly has mentioned looking into other local partnerships for government entities in need of space.
Ahoy March 04, 2013 at 04:22 AM
This looks like nothing more than a scam to attract and pay for more subsidized housing in the city. I wonder how many college-aged relatives of people tied to this project will be living here with a sweet deal paying minimal rent the first year after it opens for "business".

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