Could south Ann Arbor's office district become a second downtown?

It's easy to see while walking – or driving – around downtown Ann Arbor that vacant space is scarce. According to the Ann Arbor Downtown Development Authority's (DDA) 2018 State of the Downtown report, downtown office vacancy is at 3.6%, nearly three times less than the city's average 9% vacancy rate. With downtown nearly at capacity, business owners and other stakeholders have begun to set their sights elsewhere – many of them in south Ann Arbor, near the intersection of State Street and Eisenhower Parkway.


According to Swisher Commercial's 2018 vacancy report, south Ann Arbor has the city's largest office market and over 33,000 square feet of vacant space. Oxford Companies acquired the massive building at 777 E. Eisenhower Parkway in October last year, and has since announced intent to transform south Ann Arbor into a downtown-like environment where people can live, work, and play.


"We see, over the next 10 years, the ability to get thousands of cars off the road, alleviate a portion of the housing crunch, and modernize the old-school, car-centric environment at State and Eisenhower," Oxford CEO Jeff Hauptman said in a February interview with Concentrate.


Oxford has brought in other partners to contribute to this long-term development plan, including Ann Arbor SPARK. SPARK CEO Paul Krutko says SPARK has discussed opportunities in south Ann Arbor with Oxford for the past couple of years. SPARK has also discussed investment in the area with other Ann Arbor businesses and city officials.


"(SPARK's) role is to convene private and public sectors to think about how we could use (south Ann Arbor) to create another, maybe not another downtown … but a very attractive business location for companies looking to be and grow in Ann Arbor," Krutko says.


Krutko says the State and Eisenhower corridor is an ideal location for development since it's near I-94 and a short drive from downtown.


Brett Lenart, city of Ann Arbor planning manager, agrees the State and Eisenhower corridor Oxford and SPARK are considering is a good fit for more development, specifically with transit-focused projects.


"(The corridor) is pretty automotive-oriented and office-dominant," Lenart says. "It's a great conversation to have about how to add those amenities to make it more appealing, and additional development like restaurants and services would complement this. Hopefully, reducing driving to work is a great benefit, too."


In addition to more business development in south Ann Arbor, housing, entertainment, and infrastructure additions are being considered for the area. Both Hauptman and Krutko say it's important for Ann Arbor's future to consider creating workforce housing options in the area.


"Something we hear a lot from companies is they like amenities downtown," Krutko says. "They want to be in a downtown-ish feel, where it's walkable, with housing mixed in (and) restaurants and other kinds of eating and gathering (available) without having to get into a car and drive."


Downtown-style amenities may also attract businesses, particularly tech companies, to Ann Arbor even if they can't find a location downtown, Krutko says. However, adding amenities like restaurants and entertainment involves restructuring the city ordinances for buildings in the area.


Currently, use of the corridor's office district is restricted to traditional offices, housing, education, beauty salons, child care centers, and other similar uses. Zoning ordinances would have to be revised to add restaurants and shops either near the State and Eisenhower corridor or within existing buildings, Lenart says.


Oxford has already begun working to revise city ordinances in the corridor. In March, Oxford proposed amendments to the city planning commission that would allow restaurants to be added in buildings with over 100,000 square feet in the State and Eisenhower corridor. There are only two privately-owned areas in the south corridor that meet the suggested square footage, including 777 E. Eisenhower. Because of this, city planner Alexis DiLeo says the proposal was postponed.


"(The planning commission) thought maybe that threshold was too high," DiLeo says. "Maybe it should be allowed in more places, since 100,000 square feet only allows a few buildings to have restaurants."


DiLeo says the city is currently working on an amendment to the proposal that might open restaurant usage to smaller buildings in the corridor. Besides that, Lenart and DiLeo say the city's primary focus in south Ann Arbor is to improve the infrastructure, especially for pedestrians.


The city planning department is considering a zoning ordinance proposal to encourage buildings to be more mixed-use and pedestrian-friendly through changes such as building structures closer to the sidewalk. DiLeo says proposals like this will be presented to the planning commission and city council later this year.


Anne Ryan, co-owner of the Ann Arbor Aviary, located at 2875 Boardwalk Dr. off of Eisenhower, says more pedestrian-focused infrastructure would be a welcome addition to the area.


"Some light-controlled walkways would be fantastic," Ryan says. "Sometimes it's difficult to even get from the buildings around (Briarwood) mall to the mall itself. It's almost dangerous."


Krutko says he believes any minor improvements to the area will make the south corridor more attractive not only for business, but for residents and visitors. He thinks pedestrian walkways and an emphasis on the area's look and feel are good places to start, creating "a sense of arriving someplace."


"That streetscape environment is important and signals that you are in a place you want to be," Krutko says.


While these discussions of development will take time to come to fruition, Lenart believes south Ann Arbor is an area of opportunity for the city.


"There's a lot of surface parking, the area is large, and the city has had success in shifting modes (of development focus)," Lenart says. "If we can continue to be successful in that regard, I think that gives us a lot of opportunity in this area."


Emily Benda is a freelance writer based in Ann Arbor. You can contact her at


All photos by Doug Coombe.

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