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Plans underway to replace mobile home park on Cass Lake with luxury apartments

A post-World War II mobile home park in Keego Harbor may be replaced with a luxury apartment complex.

Within about two years, Ara Darakjian and his Birmingham-based Tir Equities LLC hopes to begin construction on the 5.33-acre site on Orchard Lake Road overlooking Cass Lake in the tiny Oakland County community nestled between Sylvan Lake and Orchard Lake Village.

In the end, the 93 mobile home sites, of which only about 65 are currently occupied, are to be turned into the Residences at Cass Lake project with about 250 high-end apartments and 50,000 square feet of retail if Darakjian can get the needed approvals and financing. Darakjian wouldn’t disclose the development cost.

It would be unique in the area not just in its sheer scale of up to 72 feet but also in its raw ambition and motive — converting needed housing for low-income residents into luxury apartments for renters paying perhaps three times as much or more per month.

Darakjian views the Residences at Cass Lake as a legacy project for him and his family.

“Very rarely is a mobile home park repurposed because they are very profitable, very profitable, but this one screams to be repurposed because it is right on Cass Lake,” Darakjian said. “The only way it made sense to repurpose the community was to build a project of this size, because anything smaller than this didn’t make sense. I could just keep it going as it was. At the end of the day, it’s a business. You have to make money.”

Whereas those who rent at the mobile home park pay about $400 per month for the lot and, if they rent the mobile home, $400 to $450, rents at the Residences at Cass Lake would be more than $2 per square foot with an average unit being about 1,000 square feet. At full occupancy based on those figures, it would be over $500,000 in rental income per month just for the residential space and not including retail, compared to, at most, $79,000 for the mobile home park with 93 units paying the maximum $850 for the land and mobile home.

It would have an array of amenities, including three restaurants, a gym and grocery service, among other things.

“It’ll offer turndown service, housekeeping services, laundry service, transportation, air and hotel travel arrangements,” he said.

The project hasn’t been without backlash, particularly in its early stages. Some residents of the mobile home park were vocally opposed and expressed concerns in 2018 about the plan during planning commission meetings. A Change.org petition opposing the project garnered 2,200 supporters. Darakjian chalked the outcry up to “a bad element in the community” that “spread all these rumors” about evictions and “kicking people out.”

“None of that was true,” Darakjian said. “That person is no longer there. They’ve decided to move on. And now all of those rumors have gone.”

Yet affordable housing is still an issue in the state’s wealthiest county, where the poverty rate is 8.2 percent. The area median income in Oakland County is $76,300 for a four-person household and $61,100 for a two-person.

According to U.S. Census Bureau data, the majority of renting households making less than $35,000 per year are cost-burdened, meaning that they pay more than 30 percent of their household income on rent. For those making less than $20,000 per year (29,543 housing units), 89.5 percent of those, or 26,453, are cost-burdened, while for those making $20,000 to $34,999 (24,434 housing units), 80.5 percent (19,674 housing units) are cost-burdened. That percentage decreases dramatically to 41.5 percent (9,189 households) for those making $35,000 to $49,999 (22,126 households), according to Census data.

The project will require dozens of residents to move, but Darakjian said he has tried to mitigate the pain.

“The community at large is really very much for it because they unfortunately don’t want the mobile home park there anymore,” he said. “We did everything we could on our end to really soften the blow. We’re not moving fast on the project, and there’s no way I’m going to kick somebody out of their home. I’ve made a commitment very simply to say, ‘Hey, I want to give you guys more than ample time, we’ll even provide some support and some help for you to find a different place to live once we get to that point.'”

The financial support offered, Darakijian said, was between $1,500 and $2,500 per resident, plus logistical support helping residents find other communities to live. In an Oakland Press article a year ago, the newspaper noted concerns from nearby residents about the project’s height and setback.

Darakjian said he originally didn’t plan to offer financial assistance for residents but changed that after hearing from the community.

“Funds will be distributed only when a construction date has been determined and will be on an as needed basis,” Darakjian said. “All requests will be processed through our management company.”

Robert Kalman, Keego Harbor’s mayor, said he hasn’t heard much from the public about the project recently, perhaps because the site plan has received planning commission approval already.

“While we had quite a bit of public commentary and opinion when the project was first announced, lately I personally have not received much feedback — positive or negative,” he said. “The No. 1 question that I do receive today is, ‘When are they starting to build?'”

Jered Ottenwess, Keego Harbor’s city manager, said the city and Tir Equities are in the process of negotiating a development agreement and that upon completion, it would be sent to the city council for approval, perhaps in March or April.

He said no local tax abatements or other incentives have been requested at this point, although state incentives could be a possibility.

Kalman acknowledges that Keego Harbor is a changing community, but doesn’t believe affordable housing is going away in the area.

“Keego Harbor has been a diverse community for years. While our city is going through a change, if you look at the region that we are in, a lake community in Oakland County with West Bloomfield schools, and compare it to surrounding cities, we offer a variety of affordable housing options. There are apartments and rental homes available, as well as a variety of cottage style homes near Cass Lake and Sylvan Lake. The change that we are going through will not eliminate affordable housing.”

Big plans

Darakjian is no stranger to challenging development efforts; the Keego project would be his largest.

In Birmingham, he filed a federal lawsuit against the community for a request for proposal selection process he felt was rife with favoritism for a project on a 4-acre site west of Old Woodward Avenue and north of Willits Street downtown.

In May 2016, the city issued requests for qualifications to Morningside USA out of Chicago; Woodward Bates Partners LLC, which consisted of Ron Boji, John Rakolta Jr., Paul Robertson and Victor Saroki; Southfield-based Redico LLC and Birmingham-based architecture firm McIntosh Poris Associates; and Tir Equities. In September 2017, a request for proposals was issued, with proposals from Woodward Bates, Redico and TIR Equities received in January 2018.

By May 2018, the city’s Ad Hoc Parking Development Committee recommended Woodward Bates Partners to the city commission, which directed city staff to negotiate with the developer on the property. By June, Tir Equities — which is named after the Armenian god of wisdom and knowledge — was eliminated from consideration.

His company’s project would have brought with it a 15-story tower — a controversial proposal in a city that generally limits downtown development to no more than five stories, with just a few exceptions — along with 60,000 square feet of retail; 371 apartments; 22,000 square feet of commercial space; a park, plaza and other features, according to the lawsuit. The tower would be “stepped” downward to reach a four-story height at the street level “to reflect the design and tradition of existing buildings,” the lawsuit says.

Ultimately in July 2019 Darakjian lost the case, but not his nerve for big projects.

“For us, this is a family asset,” Darakjian said. “It’s not going anywhere. When we build it, we’re not building it to sell it. We’re not building it to turn it and flip it. This is a legacy asset for us.”

If built, the Residences at Cass Lake would be managed by FirstService Residential out of New York City and its amenity package would be by Live Unlimited, a subsidiary of FirstService, Darakjian said. Grand Rapids-based Rockford Construction is the contractor and Designhaus Architecture out of Rochester is the architect.

 

Posted By: Crain’s Detroit Business on February 2, 2020.  For more information, please click here to read the source article.

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